A constant refrain among ObamaCare advocates involved the notion that Americans who liked their current health care plans would be able to keep them under the new federal regime. Byron York‘s latest Washington Examiner article suggests you shouldn’t count on that promise.
Spoken with great confidence, Obama’s words were meant to reassure, and it’s possible many Americans believed them. But at the same time, the president and his Democratic allies in Congress built the new health care law on provisions that, when acting together, guarantee that some people — perhaps many people — won’t be able to keep their health care plans.
On the one hand, the new law orders the establishment of health care “exchanges” through which anyone can purchase government-subsidized coverage. On the other hand, the law levies fines on employers who fail to offer coverage to their employees — but sets the fine far below the cost of coverage. In 2010, the average employer paid $4,150 to cover a single employee and $9,773 for family coverage. (Both figures are about double what they were in 2000.) The new law sets fines for employers who don’t cover their workers at $2,000.
So when it takes effect in 2014, the law will give employers a choice: Continue to offer increasingly expensive health coverage, or pay a relatively small fine, save a lot of money, and let employees buy their own subsidized coverage on the exchange. The incentive seems pretty clear.
Now, it should surprise no one that more and more companies are exploring the possibility of dropping their employee health coverage in 2014.