Obamacare will Increase Job-Based Coverage

Opponents of Obamacare (the Patient Protection and Affordable Care Act for those who prefer the formal title) often assert with great confidence that it will take away job-based health insurance from American workers. Yet analyses by the Congressional Budget Office, the Rand Corporation, and the Urban Institute do not support this conclusion at all. In fact, the evidence shows just the opposite: Obamacare will increase job-based coverage.

The Urban Institute used their highly respected Health Insurance Policy Simulation Model (HIPSIM) to provide a new objective analysis of the impact of Obamacare on the job-based coverage and costs. They modeled what job-based coverage would look like if Obamacare were implemented today—in 2012.

Here’s what the Urban Institute found:

• Job-based coverage would increase by 2.7 percent—that’s an additional 4.1 million people with job-based coverage.
• All employers would see a decrease of 0.4 percent in their average cost per person insured. For businesses with 100 or fewer workers, the cost per person insured would decrease by 7.3 percent.

And, the Urban Institute’s findings don’t capture the full potential of Obamacare to stabilize and increase job-based coverage for American workers and their families. The authors point out, “The future of employer-sponsored coverage is overwhelmingly determined by the state of the economy and by the growth in health care costs,” but the analysis doesn’t take into account how Obamacare will affect these factors. The law has health care payment and delivery reforms that will slow the growth in health care costs, and in turn, lower the cost of health insurance for both employers and consumers. For example, Obamacare includes incentives for our health care system to prioritize quality of care over quantity (there really is no need to have the same blood work done by your primary care doctor, your specialist, and the lab). And it creates incentives to coordinate patient care, reward reduction in medical errors, and reduce unnecessary hospital readmissions. With all this in mind, the Urban Institute authors state that “If [the new law’s payment and delivery] initiatives are successful, future growth in health care costs will be slower… and employer-sponsored health insurance will be more extensive than is now projected [in this report].”

The bottom line for businesses who want to provide health insurance—and for workers who need coverage—Obamacare is a gain, not a loss.