Obama’s Affordable Care Act Looking a Bit Unaffordable

Posted by on Aug 29, 2013 at 8:12 am

Republicans have long blamed President Obama’s signature health care initiative for increasing insurance costs, dubbing it the “Unaffordable Care Act.”

Turns out, they might be right.

For the vast majority of Americans, premium prices will be higher in the individual exchange than what they’re currently paying for employer-sponsored benefits, according to a National Journal analysis of new coverage and cost data. Adding even more out-of-pocket expenses to consumers’ monthly insurance bills is a swell in deductibles under the Affordable Care Act.

Health law proponents have excused the rate hikes by saying the prices in the exchange won’t apply to the millions receiving coverage from their employers. But that’s only if employers continue to offer that coverage–something that’s looking increasingly uncertain. Already, UPS, for example, cited Obamacare as its reason for nixing spousal coverage. And while a Kaiser Family Foundation report found that 49 percent of the U.S. population now receives employer-sponsored coverage, more companies are debating whether they will continue to be in the business of providing such benefits at all.

Economists largely agree there won’t be a sea change among employers offering coverage. But they’re also saying small businesses are still in play.

Caroline Pearson, vice president at Avalere Health, a health care and public policy advisory firm, said there’s a calculation low-wage companies will make to determine if there’s cost savings in sending employees to the exchanges.

“The amount you have to gross up their wages so they can get their own insurance and the cost of the penalties may add up to less than the cost of providing care,” she said.

It’s a choice companies are already making. The number of employers offering coverage has declined, from 66 percent in 2003 to 57 percent today, according to Kaiser’s study.

Full story.

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