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Barrasso's 2nd Opinion: Despite Promises, Many Americans Will Lose Employer Based Coverage

New Study Shows Many Employers Considering Dropping Health Coverage

July 26, 2012

During the health care debate, the President promised Americans that health insurance premiums would go down and if you like your insurance plan you would be able to keep it. After the Supreme Court issued its decision regarding the law, the President said again:

“If you’re one of the more than 250 million Americans who already have health insurance, you will keep your health insurance.”

Today, U.S. Senator John Barrasso (R-WY) pointed to a recent study by consulting firm Deloitte, that found as a result of the health care law, many Americans will either lose their employer-provided coverage or face higher insurance premiums.

Excerpts of Senator Barrasso’s remarks on the floor of the U.S. Senate:

“I come to the floor today reminding myself and the Senate of some promises the president made during the health care debate. The first was he stated that health insurance premiums would go down. The second promise he made is he said if you like your insurance plan, you can keep your insurance plan.

“Perhaps the president does not know that his health care law has already forced many colleges and universities to stop offering their student health plans.

“Or perhaps the president is unaware that you can no longer purchase a child-only health insurance policy in many states, including my home state of Wyoming.

“Apparently the president has not spoken to businesses across the country who must actually deal with the ramifications of his health care law.

“Now we have a new study, a report that has come out from the consulting firm Deloitte, and it's spoken to businesses all across the country about the law.

“The results were compiled in their 2012 survey of employers. In this report, the company did random surveys of 570 companies with 50 or more employees. These are companies that currently offer health insurance to their employees.

“So, what are the results? The results are not encouraging.

“They found approximately one in ten employers are considering dropping the health coverage that they currently supply to the employees and dropping that insurance over the next few years.

“Specifically, they found that 9% of companies expect to drop their insurance coverage while another 10% of respondents said they weren't sure about how they would proceed.

“The survey revealed that small businesses, those with between 50 and 100 workers, are going to be hit especially hard by this new health care law. 13% of these businesses in this category stated that they would drop their insurance coverage in the next one to three years.

“Now, keep in mind in the nonpartisan Congressional Budget Office, when they did some evaluations, they thought that only 7% of workers would lose their employer-provided health insurance starting in 2014 because of the law.

“Companies also made it clear that how implementation of the health care law moves forward would impact their decisions. Well, how so?

“Approximately one-third of the companies stated that they might decide to stop offering health insurance if they find that the law that was passed by the Democrats in this Senate, in this body.

“So if these companies find that the health insurance under the law required by the law, if they have to offer more generous benefits than they currently provide, they are likely—one third—to discontinue providing health insurance. Now, why is that?

“Well, it is because the president's health care law actually mandates what kind of insurance companies must give to their employees. This is what's called the essential health benefits package, or as most Americans refer to it as government-approved insurance.

“It may not be the insurance you want, may not be the insurance you like, may not be the insurance you need, may not be the insurance you can afford, the president and those who supported this law say they know better than the American consumers, the American workers, and the people in need of insurance.

“So instead of allowing businesses and workers to decide what kind of insurance they need, the health care law empowers federal bureaucrats to make this decision.

“Businesses that decide they can't afford to offer this government-approved insurance are going to be forced to pay a penalty. So how big is the penalty? That's a legitimate question. The Supreme Court says it's a tax. They're going to have to pay a tax.

“So for companies over 50 employees, they will have to pay, starting at $2,000 per worker. That sounds like a lot of money, but keep this in mind. In 2011, it was found that the average cost of employer-provided health insurance for families was over $15,000.

“So they can decide, do they pay the government $2,000—that tax—or do they pay $15,000 for the insurance? This means many companies would have a sizable financial incentive to simply drop the insurance.

“What happens to these folks that previously had the insurance that the president said they could keep—of course we all know that they can't because once again the president misled the American people, I believe intentionally.

“Well, then these employers who are dropped would have to enroll in a government-run exchange.

“Many of these individuals would qualify for subsidies from the federal government to help them purchase insurance. Subsidies to help them pay for insurance that they were previously getting at work, but now because of the health care law they can't get it there anymore.

“So who's going to end up subsidizing this is well, the American taxpayers are now going to be paying for the health insurance instead of the employer.

“This is not only going to cause many Americans to lose their health insurance, but it will also make the trillion-dollar health care law even more expensive than the Congressional Budget Office said this past week.

“Many businesses surveyed stated that they do not intend on dumping the health insurance plans, but they said something else: they're not going to stop providing it but instead employers are saying that hey, the workers, if you want to keep this, you're going to have to pick up additional costs of your insurance coverage and you're going to have to do it, helping to pay higher co-pays, higher deductibles, or participating and contributing to the higher premiums that they're going to are to pay.

“This means employees have essentially two alternatives under this health care law. Either they will lose their employer-provided coverage or they will be facing higher insurance premiums.

“For over 150 million Americans who receive their insurance through their employer, neither of these choices is a good one.”