Do CBO Projections Portend The End Of Employer-Sponsored Health Benefits?

April 28, 2015

The Congressional Budget Office (CBO) recently released updated estimates indicating that 7 million fewer people will have employer-sponsored insurance in coming years. Some Patient Protection and Affordable Care Act (PPACA) critics responded by speculating that the employer mandate to provide health coverage to full-time employees (those working more than 30 hours a week) will cause more employers to “do the math” and decide it’s less expensive to pay the penalty than to pay for the coverage.

John Barkett, Director of Health Policy Affairs for Exchange Solutions at Towers Watson, weighed in on the topic, noting that the flaw in the argument is that it assumes employers make decisions about employee benefits based strictly on cost. Said Barkett in a recent article he wrote for The Institute for Healthcare Consumerism (IHC), “This is simply not true.”

Barkett also pointed out that the trend of fewer people receiving health insurance from their employers is not “new” since the ACA. A 2013 study from the Robert Wood Johnson Foundation reported on declining scope of employer-sponsored health benefits over the past decade – prior to the passage of the health care reform law.

For Barkett’s complete analysis, read his article in the IHC.

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