What's Going on With Employer-Sponsored Health Insurance?

Whitehouse.gov

Earlier this week the Congressional Budget Office (CBO) released its latest estimate of how much the health law would increase insurance coverage. The CBO estimated that, as a result of Obamacare, 12 million people will be insured this year who otherwise would not have been.

The CBO's estimate comes on the heels of a survey by the RAND Corporation, completed on March 28 of this year, which found that health insurance coverage under Obamacare rose by 9.3 million. 

At first glance, these might not seem to be wildly incompatible. CBO's figure is an estimate for the full year. RAND's figure comes from a survey that goes most of the way through March. In any case, there's going to be some amount of natural variation.

But RAND's survey finds that the vast majority of the increase came via a spike in employer-sponsored insurance; the findings suggest that, perhaps as a result of the health law's coverage mandate, a large number of people obtained employer coverage who did not previously have it. The CBO, in contrast, actually projects a decrease in employer coverage of 2 million by next year, and a further decrease of 7 million the year after that. It's hard to imagine a plausible, realistic scenario in which these two results are compatible.

Was RAND's unusual finding an artifact of fall open enrollment periods for employer coverage, or even just a fluke result? The study had a rather large margin of error, with the topline insurance figure subject to a 3.5 million over or undercount. There are other reasons to wonder about the survey results: Benefits manager Aon Hewitt found recently that there was very little enrollment growth amongst those eligible for employer health plans in the 2014 coverage year.

It's hard to tell what's actually happening here. RAND's survey results don't match up to what almost anyone expected, but unlike the CBO, which is crunching outside data to make a projection, RAND is relying on their own measurements taken on the ground. If RAND is right, though, then Obamacare's effects will look quite different from what anyone assumed, and the exchanges will be much less of a factor than the law's designers planned. I suspect it will be a while before this is all sorted out.

Comments

[Rich]

It's hard to tell what's actually happening here.

NO!! Democratcare has WON!!

[Lord at War]

There's something happening here
What it is ain't exactly clear
There's a man with a gun over there
Telling me, I got to be insured

[albo]

I suspect it will be a while before this is all sorted out.

You're assuming that the Democrats, the administration, and the media cares that it's ever sorted out. Ambiguity defaults to "success!"

[alan_s]

"It's hard to tell what's actually happening here."

Who the hell cares? Immoral laws are immoral because they are immoral. No need to analyze any deeper than that. The effects of wealth destruction are a given, even if we can't immediately see in what ways.

[robc]

Immoral laws are immoral because they are immoral.

Bolded for extra emphasis.

[Hyperion]

What is happening is that no matter what the effect of the program is, the Democrats will continue to claim it's a wild success, and that we can never/ever even consider getting rid of it.

The Republicans will just throw up their hands and say 'Well, look, we tried'.

Then the Democrats will use the 'huge success' to start planning another huge federal bureaucracy that we need to help the poor wiminz and childins, and they will create another massive clusterfuck that we can never get rid of, and another, and another.

In the meantime, team Red will call for more military spending, more money for the WOD, and the two teams will merge into one big orgy of government expansion and spending.

And then the entire thing will finally come crashing down from it's own unsustainable weight.

Is there any other possible outcome?

[Banjos]

You forgot the part where the left blames the economic collapse on the very limited free market that remains.

[Virginian]

As long as two kulaks are meeting in the dead of night to trade turnips for eggs, it will be the fault of the free market.

[Dweebston]

It's been Trotsky and his cabal of enemies of the worker state all along.

Perhaps paradise in five more years, comrade.

[KDN]

I don't think so. This whole episode reminds me of the Wagner act, which was never fully repealed but had its worst excesses curtailed 12 years later. My bet is something similar eventually happens here - the law is obviously terrible, but the Democrats can never allow it to be stricken from the books (largely for reasons of pride).

[R C Dean]

Here's what I think is happening:

Lots of people lost their individual coverage last year, and the HIE products were (frequently) terrible. Some of these people were eligible to get on a spouse's or possibly other person's employer plan but hadn't done so because they had an individual policy they liked. They've been, in effect, forced onto employer plans they didn't prefer. You might also be seeing some gullible people who signed up for employer insurance because they thought the mandate was actually going to be enforced this year. I think this probably lines up better with Aon's finding of modest growth, and I like Aon because they actually have first-hand knowledge.

What's interesting inside the Rand study is this:

In fact, per that table, there are actually more people who had insurance through work last year and now have no insurance at all (2.1 million) than there are people who had no insurance last year and now have it through the exchanges (1.4 million).

The ranks of the uninsured grew by 2.1 million who used to have employer coverage, and were reduced by only 1.4 million who now have it through the exchanges.

[Matrix]

SUCCESS!

/progderp

[The Other Kevin]

This corresponds to what I am seeing. My employer notified us that our group plan would be cancelled as of May 1 because it doesn't comply with the Obamacare requirements. They could not find an affordable alternative, and we have fewer than 50 employees, so they just decided not to offer health insurance. Recently, though, thanks to the "generosity" of our Dear Leader, via one of the those infamous delays, we can now keep our plan until December, but after that, we're not sure what will happen.

This kind of thing is happening to other small businesses. I am also hearing that larger businesses are considering dropping spouse coverage due to cost increases. There is also a school district nearby that is considering replacing direct employees with contractors so they don't have to cover insurance costs.

Obamacare just keeps on giving.

[Hyperion]

The RAND Corporation

SEE! We tried to tell you Paulbots that you are all controlled by one giant corporation ran by the Pauls and funded by the Koch Bros! They even named their soul killing machine after your hero!

/progtard

[Dweebston]

It's not named for Rand Paul, you lunatic. It's named for Ayn Rand, the bitch from Russia who continues holding the reins on free-market ideologues through her eleventy thousand pages of overwrought fiction.

[Dweebston]

"O'care exacerbates employment serfdom as millions more are irrevocably wedded to their work benefits."

Somehow I doubt that's a headline we'll be seeing. But I suppose Community Rating fixes that by ensuring everyone in the individual market is proportionally screwed.

[Paul.]

The CBO estimated that, as a result of Obamacare, 12 million people will be insured this year who otherwise would not have been.

And the new Census Bureau counting method backs this up.

[R C Dean]

Also, lets not forget that the CBO counts people on medical welfare (Medicaid) as having "insurance", and says that 7mm of the 12mm are really on Medicaid.

So they are claiming that a total of 5mm people on net will be added to private insurance this year. Which I think is highly unlikely, because no industry source has any data that even remotely supports that.

The other thing in the CBO study is their projections penaltax revenue. Around $600BB over the next 10 years. Ponder that, on the tree of O.