Unbiased Analysis of Today's Healthcare Issues

Will the ACA cause employers to drop health insurance coverage?

Written By: Jason Shafrin - Oct• 01•13

As describe in this recent Health Affairs article, as of 2011, your likelihood of being offered health insurance looked like this:

 

HI_Offer_by_firm_size

Courtesy of Health Affairs.

How will the ACA affect the share of individuals who receive coverage (and what type of insurance coverage they receive). This table describes some of the consequences.

 

ACA_provision_effect_on_emp_HI_offer

Courtesy of Health Affairs.

Popular reports indicate that many of these findings will likely be true. Trader Joe’s announced that it was dropping insurance coverage for its part-time employees.

What quantitative effect will the ACA have on health insurance level coverage? Experts from the Congressional Budget Office (CBO), RAND, the Urban Institute, the Lewin Group and the Centers for Medicare and Medicaid Services (CMS) make the following projections.
Insurance_Results_from_Simulations

Courtesy of Health Affairs.

One issue that this article ignores is that employer may shift workers from full-time to part-time status to avoid penalties. Fast food companies such as Subway and Papa John’s are cutting worker hours to 29 per week to avoid these penalties. An NBC News survey also found that cutting worker hours is likely to happen.
Exchange_Part

Courtesy of Health Affairs.

If more and more individuals move to the Exchanges, the federal government outlays to fund the Exchange subsidies may grow extensively. Jay Bhattacharya and co-authors find the following in a 2013 Health Affairs article.

We found that federal outlays and revenues for health exchanges were quite sensitive to changes in current household contributions to insurance. Because the extent of employers’dropping coverage is uncertain, our results imply that federal obligations will vary greatly based on the health care decisions of individuals, employers, insurers, and the government.


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