Friday, September 13, 2013
Self-Funded Health Plans Threatened with ExtinctionToday a record 61% of covered workers are in a self-insured plan, according to a Kaiser Family Foundation 2013 Survey, up from 49% in 2000.
“The Attack on Self-Insurance, “ Wall Street Journal, September 13, 2013
The Obama administration and its allies are vowing to close the self-insurance “loophole,” the “loophole” in this case being health plans not subject to Obamacare mandates and penalties.
Under the self-funded model and the 1974 Erisa law, businesses and many unions bypass commercial plans and pay directly for medical claims of workers. Self-funding isolates companies from federal and state mandates and lowers health benefit costs for businesses and premiums for workers. State mandates, which number in the 100s for such things as chiropractic care, acupuncture, and contraceptives, sharply drive up costs.
Large businesses have known this for a long time. Now small businesses with 199 or fewer workers are getting into self-funding. In a 2012 study , the Urban Institute found ObamaCare incentives will cause 60% or more of small firms planning to introduce self-insurance model.
The Obama administration and its ideological allies do not like this trend. They fear this self-funding shift will cause an insurance premium “death spiral.” They worry that self-funding small businesses will drive up premiums for the rest of Americans, particularly the middle class, making Obamacare unaffordable.
Consequently, Obama officials and representatives are working with state legislators to outlaw self-funding and stop-gap health insurance policies. This policies are beyond federal government control, which does not set well with Obama followers. Apparently the campaign promises that” If you like your health plan you can keep it” does not apply to the 61% of workers in self-funded plans.
Tweet: Obama administration may try to outlaw self-funded health plans, which now cover 61% of workers, including many union members.