Tags: Healthcare | Fines | Cheaper | Insuring | Workers

Study: Paying Healthcare Fines Cheaper Than Insuring Workers

Wednesday, 26 May 2010 08:23 AM

Millions of American workers could lose their employer-provided health insurance as because paying the fines associated with Obamacare costs companies less than insuring workers, says John Goodman, CEO of the National Center For Policy Analysis.

Goodman says that, according to the House Energy and Commerce Committee, AT&T, Caterpillar, John Deere and Verizon have all crunched numbers for the consequences of dropping their employer-provided insurance and paying a fine of $2,000 per employee, which would leave their employees with the option of buying highly-subsidized insurance in the newly created health-insurance exchange.

AT&T, Goodman notes, 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,” leaving AT&T with a tidy profit of $1.8 billion, he writes in The Wall Street Journal.

If employers stop paying for their health insurance, employees would get more take home pay, but whether they are net winners or losers depends on how much money they make.

“A Congressional Budget Office (CBO) analysis of the House version of ObamaCare, which is close to what actually passed in March, assumed a $15,000 premium for family coverage in 2016,” Goodman says.

“Yet the only subsidy available for employer-provided coverage is the same one as under current law: the ability to pay with pretax dollars.”

For a $30,000-a-year worker paying no federal income tax, the only tax subsidy is the payroll tax avoided on the employer's premiums — which is only worth about $2,811 a year.

But if this same worker goes to the health-insurance exchange the federal government will pay almost all the premiums, plus reimburse the employee for most out-of-pocket costs.

“All told,” Goodman says, “the CBO estimates the total subsidy would be about $19,400 — almost $17,000 more than the subsidy for employer-provided insurance.”

Much of the financing over the initial 10 years of Obamacare is siphoned off from an estimated $575 billion in projected savings to the Medicare program, Heritage.org reports.

And unless Medicare savings are captured and plowed right back into the Medicare program, the solvency of the Medicare program will continue to weaken.

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Millions of American workers could lose their employer-provided health insurance as because paying the fines associated with Obamacare costs companies less than insuring workers, says John Goodman, CEO of the National Center For Policy Analysis. Goodman says that,...
Healthcare,Fines,Cheaper,Insuring,Workers
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2010-23-26
Wednesday, 26 May 2010 08:23 AM
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