By Sen. John Barrasso Monday, July 25, 2011
CASPER, Wyoming — Most American workers value their employer provided health insurance. It gives them the security of knowing they can get the care they need, from the doctor they want, at a price they can afford.
All that will change drastically if the President’s healthcare law remains on the books. That’s not just a warning from a conservative Republican — the administration’s own Chief Actuary of Medicare estimated that over 14 million people would lose their employer coverage over the next 8 years.
Even some of the administration’s most ardent supporters are starting to complain. The Service Employees International Union (SEIU) is on record saying it would be “financially impossible” to follow this law.
In a study co-authored with my colleague, Senator Tom Coburn (R-OK), we reported the disturbing fact that more than half of all employers could have to stop offering employee health benefits altogether by 2013.
A June study by McKinsey and Company concluded that 30 percent of employers would definitely cease offering employee benefits altogether by 2014. That same study showed that among those employers who know how the law will affect them, as many as 50 percent could drop out.
The Obama Administration already has handed out waivers exempting more than 3 million Americans from the law’s mandates. About half have gone to people who get their health insurance through unions like the SEIU.
If the terms of this onerous law now are “financially impossible” to meet for unions, why did they lobby for it in the first place? And, more important, why can’t all Americans get waivers, too?
The answer to both these questions is that the new healthcare law is designed to ultimately end employer provided coverage altogether.
Under the law, businesses are permitted to drop out of paying for employer-provided coverage so long as they pay a fine of $2,000 per employee. This number is far smaller than the $15,000 it costs businesses to provide family health benefits to each of their employees. Small businesses face an even clearer incentive to drop coverage for their employees. They are not required to pay this fine for the first 50 workers who lose coverage.
And where are those workers supposed to go? The new healthcare law has set up healthcare “exchanges” for them to enter. These “exchanges” are shorthand for insurance markets where as much as 80 percent of the cost of a family’s insurance could be borne by taxpayers.
Under these circumstances, the natural response is for businesses to drop coverage for their employees altogether and simply offer them less expensive cash benefits. Meanwhile, the employees will have to replace the coverage they like with a plan Washington mandates.
The really bad news for taxpayers is that the annual cost of providing these huge subsidies — about $900 billion — is more than nine times what the White House is willing to admit.
This is because the estimates Washington uses to claim this law is “deficit neutral” assume that no employers will drop coverage at all, even though it is clearly in their financial interest to do so.
The facts are clear. The healthcare law takes away the coverage that Americans have and will drive America further into debt. It is bad for patients, bad for providers and bad for taxpayers. I am working to repeal and replace this law with patient-centered reforms.
Americans want high quality, affordable healthcare coverage. The President’s healthcare law doesn’t come close to achieving that goal.
Sen. John Barrasso is a second-term Republican from Wyoming and one of a few physicians serving in Congress. An orthopedic surgeon, he received his medical degree from Georgetown University. Readers may write him at 307 Senate Dirksen Office Building, Washington DC 20510