Well this isn’t particularly encouraging

From Professor Glen Reynolds:

Meanwhile, my former colleague Colleen Medill, an ERISA expert, writes:

I don’t know if you will see this in your volume of email, but you might.

I am deeply into studying the impact of Obamacare on employers, and I have been communicating with highly sophisticated ERISA lawyers who are advising employers, from Fortune 50 companies to small firms under 50 employees, on whether to keep or drop or modify their employer group health plans.

No company wants to admit that they are considering eliminating health insurance as an option, or be the first one to drop their health insurance plan, but once a competitor does so, the preference cascade will begin. The clear sentiment is “We will not be the first one to drop our health insurance plan, but we would be a close second.”

The coming preference cascade for employer group health plans is what the Democrats fear the most, because Obamacare was sold to the masses as “if you like your health insurance plan, you can keep it.”

The people who really know the law, and who have been following the avalanche of regulations, have already figured this out. It will take a while for this specialized knowledge to seep downward, because right now only $800+ an hour ERISA attorneys and the most sophisticated HR people understand how Obamacare really works.



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17 responses to “Well this isn’t particularly encouraging

  1. Anonymous2

    I’d call it encouraging because if ten or twenty million people lose their employer-provided insurance the ensuing catastrophe should convince even low information voters and Obama swooners that Obamacare, and possibly even Obama himself, must go. The longer this abortion drags on the worse conditions will be.

  2. Peg

    I believe this was all part of the plan. They wanted Obamacare to fail – so we’d all be forced into single payer. You non-believers – just wait and see…

    • I’ve said the same thing all along, Peg – they’ve wanted single payer for decades, ObamaKare, with it’s guaranteed-to-fail structure, was just the best they could do at the time and they knew it, and didn’t care: once the concept was established, the first step taken, the rest would follow.
      Again, it’s just like their desire for more gun regulations: they want to disarm the civilian population but will settle for what they can get now and the next time a movie theater is shot up, a politician gunned down, they’ll inch a little further.
      Only difference I see is that ObamaKare will be such a colossal, immediate failure that they’ll be able to move onto nationalized healthcare in one fell swoop.

      Which is what they want: it’s not about quality of care, it’s about control of the people.

      • Peg

        Absolutely correct, Christopher. We Americans have an amazing system of government and freedom and capitalism – and some millions of us want to destroy it. Boggles my mind.

  3. Cos Cobber

    Yep, my employer ( a loyal dem and satisfied Obama supporter) Is never shy on these matters. He said you can forget your healthcare in a couple years thanks to Obamacare. We’ll just increase your pay some as an offset for the lost benefit and you go wrestle with insurance companies. Don’t know the particulars other than it’s projected to be tax punitive for our firm, so bye-bye. As individuals we won’t have the buying power our firm had, nor the benefit of mixing families with singles.

  4. Anonymous2

    Only problem, Peg, is that single-payer probably can’t get through Congress until at least 2015, if then. What happens in the interim? Will the majority that abhors Obamacare suddenly want Obamacare on steroids?

    • Libertarian Advocate

      When the middle class finally sees how the proggy dems have fooked ’em, they may well want to tear the dems limb from limb, electorally speaking of course.

    • Peg

      I’m really not sure what will happen. This much I know; somehow, some way – the left will blame it on conservatives and Republicans. I’m awaiting bigger and better and more imaginative lies than we’ve ever seen.

      In the meantime – eat your veggies, wear your seatbelt and God help you if you really need some serious healthcare.

  5. Front Row Phil

    Have spent the last 5+ years inside the belly of big insurance (first Cigna, now Aetna) creating their marketing materials. They, too, know what’s coming, especially among the large corporations that are their bread and butter and caviar. Avalanche is an apt description. Many employers can’t wait to stop playing middlemen between their employees and the health insurers. They’re happy to rid themselves of the HR administration and give employees a pail of dough to help them buy their own insurance, even though it means getting slapped with a penalty for not offering it. Workers will be able to pick and choose the coverage they want from a pool of insurance companies. It’s almost like capitalism. As long as people are minimally insured (and that’s all most people will be able to afford) the feds will be happy. The line “and you can keep the health insurance you currently have” is true — but only for the wealthy. The poor will get minimal, wait-in-line coverage. The middle class will pay more and get a lower caliber of care. And Obama will have perpetrated a scam that dramatically shifts the equilibrium of the country leftward. Welcome to Europe.

  6. hunt1232003

    It is not just the well advised, small firms that pay for individual policies on a few employees are rolling the $ into employee comp (with offsets for the extra tax) of the people they decide to keep. One bought automated equip & operates w/o employees & does well. Since most of the employment growth has been in the 16-19 & 60+ age groups it looks like the ACA is going to be a private sector employment killer for those folks too. Another impact is on the small hospitals that cannot afford to comply with the records regs that have come out so far. This weekend I was advised that a small rural hospital was closing because it could not justify the cost of compliance. It has a good emergency dept etc that will be gone. The next closest ER is 40 miles away. If the small hospitals go there will be a lot more people that don’t make it. Maybe Obama plans to save money by having the rural families bury the ones who get in wrecks instead of treating them the way we do now.

    Sent from my iPhone

  7. Anonymous

    Wouldn’t it be ironic that the arch capitalists become the ones that push America into single-payer. Makes you wonder about the infallability of the “market”, no?

    • Cos cobber

      How do you come to this conclusion- that arch capitalist are pushing us towards single payer? The health insurers are positioning themselves fr managed care in what form that comes about. Health insurers will increasingly function like defense contractors in that learning to swim with the government is the only way.

  8. Anon

    Most of the big companies already comply with the mandates. It is the retail industry that does not. The law is more administration though.

    Eventually employers may move from group to individual policies in large numbers. We will wait and see.

    • Anon, it is the retail and food industry that’s moving there right now – article to that effect in today’s WSJ (I think I saw it in the WSJ) but they were saying the same thing that the ERISA lawyer/colleague of Glenn Reynold’s is observing in her “big company” clients: n one wants to be the first to do it, but once someone else does, many will follow – the “cascade effect”, I believe she termed it. As you say, we’ll have to wait and see. I did note that one executive today pointed out that the penalty for not providing insurance is $2,500 per employee while a bare bones policy for that employee averages $4,500 and for a family of four, $11,000 +. Every HR bean counter in the country can do that math. Or, to quote an earlier reader, “even Jerry understands this”.

      • Cos Cobber

        A single policy in Fairfield county something closer to 10k….so yeah, companies will pay the penalty tax…but. I guess that was the whole idea…