As millions of Americans in the individual health insurance market place continue to lose their coverage, analysts are looking ahead at the fallout we can expect to see when the employer mandate goes into effect in 2015. We've already seen employers and companies dropping health coverage altogether and cutting full-time workers to part time in order to avoid massive health insurance costs but now, Forbes reveals that was just the beginning.
Mid-range estimate: 51% of employer-sponsored plans will get canceled
It turns out that in an obscure report buried in a June 2010 edition of the Federal Register, administration officials predicted massive disruption of the private insurance market.
the administration’s commentary in the Federal Register did not only refer to the individual market, but also the market for employer-sponsored health insurance.
Section 1251 of the Affordable Care Act contains what’s called a “grandfather” provision that, in theory, allows people to keep their existing plans if they like them. But subsequent regulations from the Obama administration interpreted that provision so narrowly as to prevent most plans from gaining this protection.
“The Departments’ mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013,” wrote the administration on page 34,552 of the Register. All in all, more than half of employer-sponsored plans will lose their “grandfather status” and get canceled. According to the Congressional Budget Office, 156 million Americans—more than half the population—was covered by employer-sponsored insurance in 2013.
Another 25 million people, according to the CBO, have “nongroup and other” forms of insurance; that is to say, they participate in the market for individually-purchased insurance. In this market, the administration projected that “40 to 67 percent” of individually-purchased plans would lose their Obamacare-sanctioned “grandfather status” and get canceled, solely due to the fact that there is a high turnover of participants and insurance arrangements in this market.
The worst part? The Obama administration knew this was going to happen and Barack Obama repeatedly promised the opposite anyway. Congressional Democrats passed the bill and now we're finding out what's in it. In terms of the number of future uninsured Americans, we're look at more than half of those in the individual market losing their plans and at least half of those with employer based insurance losing their insurance, which leaves at the very least half of the currently insured population uninsured.
As a reminder, before Obamacare was passed in 2010, the vast majority of Americans were satisfied with the plans they had. In addition, the majority of the uninsured were satisfied with their medical care and costs. From Gallup in 2009:
Americans are broadly satisfied with the quality of their own medical care and healthcare costs, but of the two, satisfaction with costs lags. Overall, 80% are satisfied with the quality of medical care available to them, including 39% who are very satisfied. Sixty-one percent are satisfied with the cost of their medical care, including 20% who are very satisfied.
There is a clear gulf in these perceptions between the health insurance haves and have-nots. According to a Sept. 11-13 USA Today/Gallup poll, the 85% of Americans with health insurance coverage are broadly satisfied with the quality of medical care they receive and with their healthcare costs. At 79%, satisfaction with costs among Medicare/Medicaid recipients is particularly high.
The 15% who are uninsured are far less satisfied with the quality of their medical care (50% are satisfied), and only 27% are satisfied with their healthcare costs. (Sixty-nine percent are dissatisfied with their costs.)
What we're going to see is a collapse in the insurance marketplace, which is exactly what President Obama, Rahm Emanuel, Harry Reid and Kathleen Sebelius want in order to push a single-payer system. The only hope we have to avoid this scenario is for Republicans to come up with an alternative system that is ready to go before this happens. As millions and millions of people start to lose their health insurance, they'll start to panic over not having coverage, which opens up the door for the government to step in and solve its own crisis through a single-payer system. Think people won't want single-payer? They might not in principle, but when people panic and the government is the only option they have to cover an emergency, they'll take advantage of it. If this happens, there's no going back and we'll have single-payer forever.
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