Enduring ObamaCare – Week 9

Dear Policy Patriots –

If You Like Your Employer-Based Health Insurance, Pay Attention: You May Lose It. As National Center for Policy Analysis (NCPA) President John Goodman recently explained in the Wall Street Journal, “Millions of American workers could discover that they no longer have employer-provided health insurance as ObamaCare is phased in. That’s because employers are discovering that it may be cheaper to pay fines to the government than to insure workers.”

The non-partisan Congressional Budget Office (CBO) estimates that 9 million Americans may lose their employer coverage and the Chief Actuary of the Medicare program estimates 14 million. The actual number could be much higher. In both cases the net reduction in employer coverage was judged to be small because many uninsured employees would sign up for plans that they are now declining to join.
But here’s what neither agency was prepared for. Newly released documents show that AT&T, Caterpillar, John Deere and Verizon have all made internal calculations to determine how much could be saved by a) dropping their employer-provided insurance, b) paying a fine of $2,000 per employee, and c) leaving their employees with the option of buying highly-subsidized insurance in the newly created health-insurance exchange.

AT&T, for example, paid $2.4 billion last year to cover medical costs for its 283,000 active employees. If the company dropped its health plan and paid an annual penalty for each uninsured worker, the fines would total almost $600 million. But that would leave AT&T with a tidy profit of $1.8 billion.

Did You Know that ObamaCare may Increase Unemployment? A new NCPA study shows that ObamaCare’s tax credits for small businesses encourage some firms not to hire more workers. (And it may encourage them to fire some employees.) ObamaCare provides a 50 percent tax credit to companies offering health insurance that have fewer than ten workers who, on average, earn $25,000 a year. However, as firms increase in size, the subsidy shrinks.

NCPA Senior Policy Analyst Pam Villarreal explained, “If a business can make a decision to contract a procedure out or automate it – I believe losing the tax credit will play an important part in the reluctance to hire. This is a strange feature of a law proposed during a deep recession.”

NCPA Fights for You! The National Center for Policy (NCPA) continues to fight against ObamaCare. Policy analysis like the work of John Goodman and Pamela Villarreal wouldn’t be possible without your support. You can check out more NCPA policy solutions here.

Our sensible policy recommendations are only possible with your contributions. Please consider donating to the National Center for Policy Analysis. You can donate online or mail a check to:

National Center for Policy Analysis
P.O. Box 650098
Dallas, Texas 75265-0098

Thanks for your continued support!

Warm regards,
Jeanette Nordstrom
National Center for Policy Analysis

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