Businesses and their employees may have an escape hatch from many of Obamacare's worst features — the "self-insurance loophole," according to former New York Gov. George Pataki.
With a self-insured healthcare plan, the employer sets aside cash to cover anticipated medical expenses, rather than paying premiums to an insurance carrier to cover its employees. The company may hire an insurance company to manage claims.
Today, more than 60 percent of employees in large corporations, 80 percent of unions, and 15 percent of workers in small businesses are covered by self-insured plans, although many of them don't know it.
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When Congress passed the Affordable Care Act, Republicans secured a provision exempting self-insured plans from many of the taxes and mandates that Obamacare imposes on businesses and employees.
"Self-insured companies can tailor their health benefits to meet the needs of their workers," Pataki writes in an op-ed piece for the New York Post
. "They don't have to pay for services their employees neither need nor want.
"And self-insured plans pay their own medical costs without having to subsidize the healthcare costs of other groups."
But the White House is seeking to close what it calls the "self-insurance loophole" with a variety of tactics explained in a paper published by the liberal Center for American Progress, titled "The Threat of Self-Insured Plans Among Small Businesses."
A new California law greatly increases the cost to self-insure, and in New York, legislation in effect bans companies with fewer than 50 workers from self-insuring, Pataki notes.
He declares: "Republicans (and independent-minded Democrats) in Congress and in the states must stand firm against these efforts.
"Democrats are panicked. If enough businesses do not join Obamacare and instead opt into self-insured plans, their prized program is sure to implode quickly as its costs skyrocket.
"Self-insurance can save countless Americans from Obamacare's over-priced, low-choice, poor-quality healthcare."
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