When many employers stop offering health insurance to their employees...

[OrwellwasRight]

52. More and more companies were dropping coverage BEFORE the ACA. That's a fact.

Companies dropping coverage has no causal relation to the ACA. It has existed for years because costs have been rising for years. And sadly, the ACA will do nothing to control costs.

I think you might be being purposely dense. I never said any insurance cost $3,000. If I did, please find the post and quote me.

Here is my argument for about the 10th (and frankly final--because I am getting bored) time:

Right now, today, June 29th, 2012, there is no penalty 9the same as a zero penalty) for any employer who does not offer health insurance coverage. Yet, many employers still offer it. In fact, according to the National Bureau of Economic Research:

Employer-sponsored insurance (ESI) plays a central role in the financing of health care in the U.S. Currently, 162 million Americans have ESI, representing over 60 percent of the non-elderly population. ESI dominates the private insurance market, accounting for 90 percent of the market. ESI not only is an important source of insurance coverage for workers and their families, but also affects individuals' employment decisions, including the choice of whether to work, how many hours to work, and what type of job to hold.

http://www.nber.org/bah/2009no2/w14839.html

Therefore, the employers who choose to offer it now, today, June 29th, 2012, do so because they make the calculation that it is somehow in their economic interest, despite the cost (which, to use your figures, not mine, is $7500). If they dropped the coverage TODAY, they'd pay a penalty of zero per employee. And yet, many employers keep providing it.

In 2014, for employers who either drop coverage or choose not to begin providing it, they will pay a per employee penalty. Again to use your figure, the penalty per employee is $3000 (it is actually not a fixed amount and can vary -- a good chart to explain the penalty can be found here: http://healthreform.kff.org/the-basics/employer-penalty-flowchart.aspx). So, for an employer who WAS paying $7500 per employee, who chose to drop coverage, and ended up paying the max penalty, that employer would face a savings of $4500 per employee. You provide no explanation for your argument that the vast majority of employers who are not dropping coverage now to save $7500 per employee would all of a sudden drop coverage after 2014 to save only $4500 per employee.

Moreover, for employers whose current health insurance cost is zero, again, using your figures, in 2014, they will face a choice, to pay $3000 per employee and get nothing. Or pay a marginal cost of $4500 above the penalty amount, and perhaps get employees who have more longevity, put in more effort, or whatever. Some, facing a cost of $3000 per employee, to buy nothing, will make a calculation that paying more to actually provide the insurance will be worth it in terms of what they get back from employees (most won't, but some will).

Note that my argument has nothing to do with $3000 insurance.

Finally, I note that the CBO and JCT analysis is consistent with the argument presented here (some reduction in employer-based coverage, but not much):

CBO and the staff of the Joint Committee on Taxation (JCT) continue to expect that the Affordable Care Act (ACA)—the health care legislation enacted in March 2010—will lead to a small reduction in the number of people receiving employment-based health insurance. Some observers have expressed surprise that CBO and JCT have not expected a much larger reduction given the expanded eligibility for Medicaid and the subsidies for insurance coverage purchased through health insurance “exchanges” that will result from the ACA. CBO and JCT’s estimates take account of those factors, but they also recognize that the legislation leaves in place some financial incentives and also creates new financial incentives for firms to offer and for many people to obtain health insurance coverage through their employers.

http://cbo.gov/publication/43090