Shocking Survey: 30% Of Employees Will Lose Healthcare Benefits Because of Obamacare

The President said it over and over,

"No matter how we reform health care, we will keep this promise to the American people," Obama said addressing the American Medical Association. "If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you'll be able to keep your health care plan, period. No one will take it away, no matter what." He didn't let up."If you like what you're getting, keep it," Obama said. "Nobody is forcing you to shift." Source

The President is correct,  the government would not force a change, but of course just like they can do today, your employer can and will  force a change.


The way the Obamacare bill is structured, it is cheaper for a company to pay a fine and drop heath coverage for employees than to provide them with heath care.  A new study by McKinsey Quarterly released today confirms that at least 30% of employees will have to switch providers because of their company's dropping of health coverage.

The Congressional Budget Office has estimated that only about 7 percent of employees currently covered by employer-sponsored insurance (ESI) will have to switch to subsidized-exchange policies in 2014. However, our early-2011 survey of more than 1,300 employers across industries, geographies, and employer sizes, as well as other proprietary research, found that reform will provoke a much greater response.

Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.

Why the big difference, well the CBO based their estimates on what happened in Massachusetts, where the bill is similar but many provisions including the employer penalties are much different. McKinsey made their estimates using different methodology.  They actually asked employers.

The study also reported that the more employers know about the Obamacare bill the more likely they would be to drop employee coverage:

Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI.

At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.

Contrary to what many employers assume, more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI, although about 60 percent would expect increased compensation.

Many people would prefer to get more cash than heath insurance. Especially lower income employees who would not only receive higher pay but government subsidies to help them pay for the coverage at the state exchanges.

“The subsidies will keep the cost of insurance coverage from the exchanges below what many employees now pay toward employer-sponsored coverage, especially for those whose earnings are less than 200 percent of the federal poverty level,” McKinsey concludes.

In other words, both the employer and the employee might recognize that the most economically beneficial arrangement between the two could result from the lower costs an employee would pay for health care outside the workplace, because premiums and out-of-pocket costs would be subsidized by the government. At the same time, the employer could raise the employee’s salary or increase wages by a smaller amount than the penalty it would pay for not insuring the employee—provided that the wage increase plus the penalty does not equal the cost the employer would already bear.

The conspiracy theorists among us will say this was done intentionally to make things easier for the progressives next step, a single payer health care system.  Others will say, that this is an unexpected consequence of a law designed by progressives who do not understand capitalism.  The will add, of course companies will chose to drop coverage it it will be cheaper.

In a way the reason doesn't really matter, but the result does. As predicted,  Obamacare is going to hurt, rather than help the health care of America.

The entire McKinsey study can be read here