Companies see financial bebefit to dropping coverage

[Embar Angylwrath]

http://money.cnn.com/2010/05/05/news/co ... /index.htm

As I had suggested in a previous thread, there is little benefit to companies to keep employees on company paid insurance now. And if enough companies dump their employees into the exchanges, reform just got a whole lot more expensive.

And damned funny that Waxman beat his chest to get the documents, then after he saw what was in them, cancelled the hearings to try and keep them from coming out.

[Lurker]

When are you going to drop your employees health coverage?

I suggest everyone click the link and read the article that Embar posted. None of the companies mentioned in the article are dropping coverage. Not a one.

[Kulaf]

Well there is a lot of negative press going to go to the first company that does. I think Embar is attempting to illustrate that it will be a slippery slope. Once one company does it then it makes it much easier for the next.....and then next....and so on.

Rather telling that Waxman basically lied in his memo.

[Lurker]

Maybe Embar can get the ball rolling by dropping his employees health coverage.

What he fails to mention is that there was more financial benefit for companies to drop coverage before the Affordable Care Act became law.

Now at least there is some penalty for dropping coverage, protections for people that don't get employee based coverage, and numerous provisions aimed at slowing the growth of health costs and bending the curve.

If Embar want's to make the argument that every businessman but himself is only going to make a cost analysis and decide to drop coverage and that we should enact much stronger penalties, then he should make that argument, because the argument he is making is incoherent.

[Kulaf]

There was more financial benefit but no competative benefit. When you are competing for employees you are not going to look very attractive when the rest of your comptition offers healthcare and you don't. Now that stigma has been reduced if not eliminated.

[Lurker]

The same competitive forces were at work prior to reform. A company offering health benefits is more attractive than a company not offering them, and companies still get a huge government subsidy for providing some employee compensation in the form of health benefits.

I think what you mean to say is that there was no protection for employees who lost their health coverage prior to reform, and that with protection companies will not take a public relations hit for dumping coverage. Embar took it many steps beyond that, saying that employers would dump coverage and blame health reform and that they would not increase wages after dumping benefits. What's he waiting for?

[Kulaf]

No, that's not what I mean to say. Prior to this program being implemented the default healthcare was no health care, and most people looked to employers for healthcare. That is no longer necessarily true anymore. It is going to be dificult for companies to rationalize paying millions/billions in healthcare costs when they can pay less in fees to the government and let their employees get their own plans. Then the wrangling for employees will focus more on wages and there will be upward pressure for employers to offer compentative wages. The question will be are the companies better off paying higher wages and less on healthcare. Persoanlly I believe they will.

[Embar Angylwrath]

Which is what the article basically siad. The companies could drop coverage, give a raise to ostensibly cover what the government didn't for healthcare, and push employees to the exchanges.

@ Luerker.. none of the companies said they weren't dropping employees either, they dodged those questions. But when something gets presented to the board, as it did with one company, its presented for the board to consider doing, not an academic exercise.