Obama Health Care

You may or may not be in favor of Obama health care, but big changes are coming in 2014.  According to recent studies, more than half of employers that currently offer employer-sponsored insurance (ESI) will stop doing so when all of the provisions are put in place in 2014.  Many employers stated that even if they were to give employees compensation or benefits that equaled the cost of coverage, they would still come out ahead economically.
From the beginning, Obama health care has been met with mixed emotions. When employers cease to offer coverage to employees in 2014, those employees will be required to obtain their own health insurance coverage or face fines with the exception of those at the poverty level.  These fines could over time amount to as much as 2% of the employee’s income.
While it seems that those who are at the lowest income levels usually suffer most, Obama health care is no different.  The survey conducted by McKinsey recently suggests that many employers will find a middle ground that lies somewhere between keeping employee coverage the way it currently is and completely dropping health coverage for employees.  The end result will likely be based on companies increasing their bottom line while workers who make minimum wage suffer.
There are several creative options for businesses when it comes to employee health care under the Obama health care plan.  Businesses may restructure in to two companies, one consisting of low-wage employees without coverage, and one made up of corporate executives and management receiving employer-sponsored insurance.  Another scenario is to set the percentage of the insurance premium for low-wage workers that are to be paid by these workers above 9.5% of household income.  Under Obama health care, this is considered “affordable”.  Lower wage employees would have the option to opt-out of coverage and then receive subsidies to buy health coverage from any provider they choose.
Another option for businesses is to reduce the benefits offered to employees while increasing the premium that employees pay; some companies have already implemented this strategy.  While the survey revealed that about 85% of employees would stay with their employers should they lose their employer-sponsored insurance, it really isn’t that surprising considering the tough economic times we are facing and the lack of jobs.
While hourly wages continue to shrink, the number of unemployed workers in the United States continues to climb.  Is Obama health care beneficial or detrimental to citizens in this country?

Mark South
Obama Health Care

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