Patt Morrison for May 3, 2012

Employers could save $422 billion if they drop health coverage. Will they?

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Jerry Gold/KHN

Many small businesses have complicated health needs that make buying insurance challenging, says health insurance broker Debbie Stocks (left). Stocks meets with Phyllis DeMaurizi and her partner Rick Michaels, who own Rick's Custom Frame + Gallery.

A new report from the House Ways and Means Committee estimates that small businesses could save $422 billion over 10 years if they dump health coverage in 2014.

That’s when a phase of the Affordable Car Act kicks in, during which the federal government will step in to subsidize insurance for anyone earning less than 400 percent of the Federal Poverty Line. It has been central to the health reform debate whether employers would continue to pay for their employees’ health plans, or whether the potential savings would incentivize them to step back and let the federal government fill that role in 2014; on the one hand, the savings sound immense, but on the other, businesses could lose the competitive advantage they may have over another company in terms of their benefits. And companies can still get more “bang for their buck” by offering compensation in the form of good health insurance rather than higher wages.

WEIGH IN:

Does this $422 figure change anyone’s mind? If you’re a business-owner, what do you plan to do in light of this new figure? If you’re an employee at a small business, do you like your insurance? Are you interested in what might be offered in 2014?

Guests:

Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology and director of the National Bureau of Economic Research’s Program on Health Care; he was a paid consultant to both the Romney and Obama Administrations on health care reform, he helped craft Massachusetts’s universal healthcare law

Avik Roy, senior fellow at the Manhattan Institute, a conservative think tank and a contributor to Forbes.com


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