The Myth That Obamacare Will Only Affect the Uninsured



There's a sort of myth that only those who are currently uninsured will be significantly affected by Obamacare. They'll be helped, and everyone else won't notice a thing. For defenders of the law, it's a way to tell the majority of individuals in the country that they have little to worry about, because little of consequence will change.

You can see a version of this in Nancy-Ann DeParle's defensive Washington Post op-ed on "the successes of Obamacare." DeParle, the former director of the White House Office of Health Reform, wants to reassure you that if you get your insurance from your job, you don't have to worry about rising health costs.

"Critics say the law fails to bring down health-care costs," DeParle wrote last week. "A review of the facts is in order. If you get insurance at work, the new law will not disrupt your coverage or make it more expensive."

So is everyone who gets insurance from work not going to notice the law? Not exactly. Large employers and their workers will probably see the smallest impact, but many small businesses and their employees can expect costs to rise. As The Washington Post noted yesterday, the law imposes a new tax on health insurance—a tax that will be passed on to customers, mostly small employers who buy insurance in the small group market.

In many states, these will not be small increases. Estimates provided by insurers to GOP officials on the House Energy and Commerce Committee, meanwhile, suggest that double-digit premium increases will be common. (The committee asked insurers to provide estimates already completed before the committee's request was received, so it is unlikely that insurers were tailoring their estimates to what they thought committee officials wanted to hear.) In Maine, small group premiums could rise by 55 percent. In Florida, increases could be anywhere from 13 to 75 percent. An 11-state analysis by health insurer WellPoint found that, on average, small group premiums will rise by 13-23 percent. 

As for whether or not the law will "disrupt" insurance, I suppose it depends on whether or not you think that losing or dropping your insurance counts as a disruption. According to the Congressional Budget Office, about 7 million people are expected to transition from their current employer-sponsored health insurance to the law's health exchanges by 2022—an estimate that has already been increased by about 3 million since the law passed. Other estimates have suggested that the actual number could be much higher—as many as 35 million individuals over time. But even at the low end, there are a lot of people whose current employer-provided coverage will be "disrupted" following the implementation of the law.

Now, it's also likely that many of the currently uninsured will have employment-related troubles as well. That's because large numbers of the uninsured are likely to have their work disrupted. Already we are seeing anecdotal evidence and government jobs data suggesting that employers are capping hours for part-time workers in response to the law's requirement that employers provide health coverage to full time employees. Small businesses are reportedly weighing the possibility of firing employees or turning them into contractors. Researchers at UC Berkeley recently estimated that 2.3 million workers are at risk of having their hours cut back because of the law. As a result, The Los Angeles Times notes, "not only will these workers earn less money, but they'll also miss out on health insurance at work."

Yes, most of those workers will then have access to subsidized health insurance. But even with subsidies, premiums won't exactly be cheap. Particularly for many young, healthy individuals, then, it will be tempting to simply pay the law's uninsurance penalty/mandate tax and wait until sick to buy insurance. And as Ezekiel Emanuel, another former White House health adviser warned last week, if too many such individuals make that choice, the result will be higher premiums for those who do buy insurance. 

That's not to mention the health law's new benefit mandates, its restrictions on high deductible plans, or the way it potentially affects labor groups that offer multiemployer health insurance plans, which could disrupt health insurance for as many as 26 million union members. The point is that Obamacare isn't just going to be an imperfect but welcome benefit for the uninsured. Millions of people will see their work and their workplace benefits disrupted, somehow, as a result of the law.