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50-100 Million Americans Could Lose Their Health Insurance

The 2014 midterm elections are right around the corner and the president is sure making things ripe for Democratic defeat next year.

A new analysis conducted by the American Enterprise Institute stated that 50-100 million Americans could lose their health insurance by next fall.

 [T]he administration anticipates half to two-thirds of small businesses would have policies canceled or be compelled to send workers onto the ObamaCare exchanges. They predict up to 100 million small and large business policies could be canceled next year. 

“The impact I’m mostly worried about is on small young, entrepreneurial firms that will suddenly face much higher health insurance premiums if they want to offer health insurance to their employees,” said AEI resident scholar Stan Veuger. “I think for a lot of other businesses … they can just send their employees to the exchanges or offer them a fixed subsidy every month to buy health insurance themselves.”

Under the health care law, businesses with fewer than 50 workers do not have to provide health coverage. But if they do, the policies will still have to meet the benefit standards set by ObamaCare.

As reported by AEI’s Scott Gottlieb, some businesses got around this by renewing their policies before the end of 2013. But the relief is temporary, and they are expected to have to offer in-compliance plans for 2015. According to Gottlieb, that means beginning in October 2014 the cancellation notices will start to go out.

Then, businesses will have to either find a new plan — which could be considerably more expensive — or send workers onto the ObamaCare exchanges.

[...]

A survey showed 31 percent of franchise businesses, and 12 percent of non-franchise businesses, have already reduced worker hours. It also showed 27 percent of franchise businesses, and 12 percent of non-franchise businesses, have replaced full-time workers with part-time employees.

That almost mirrors Forbes’ Avik Roy’s analysis of Obamacare’s butcher’s bill last October.  Although, he combined the losses from the individual market with those in small businesses.  In all, he projected that 93 million Americans were at risk of losing their health insurance – and Obama administration knew it!

On Tuesday [Oct. 29], White House spokesman Jay Carney attempted to minimize the disruption issue, arguing that it only affected people who buy insurance on their own. “That’s the universe we’re talking about, 5 percent of the population,” said Carney. “In some of the coverage of this issue in the last several days, you would think that you were talking about 75 percent or 80 percent or 60 percent of the American population.” (5 percent of the population happens to be 15 million people, no small number, but let’s leave that aside.)

The second article, by Lisa Myers and Hanna Rappleye of NBC News, unearthed the aforementioned commentary in the Federal Register, and cited “four sources deeply involved in the Affordable Care Act” as saying that “50 to 75 percent” of people who buy coverage on their own are likely to receive cancellation notices due to Obamacare.

Concerning the employer-based market, Roy projected that 51% of those plans would be canceled.

Section 1251 of the Affordable Care Act contains what’s called a “grandfather” provision that, in theory, allows people to keep their existing plans if they like them. But subsequent regulations from the Obama administration interpreted that provision so narrowly as to prevent most plans from gaining this protection.

Another 25 million people, according to the CBO, have “nongroup and other” forms of insurance; that is to say, they participate in the market for individually-purchased insurance. In this market, the administration projected that “40 to 67 percent” of individually-purchased plans would lose their Obamacare-sanctioned “grandfather status” and become illegal, solely due to the fact that there is a high turnover of participants and insurance arrangements in this market. (Plans purchased after March 23, 2010 do not benefit from the “grandfather” clause.) The real turnover rate would be higher, because plans can lose their grandfather status for a number of other reasons.

How many people are exposed to these problems? 60 percent of Americans have private-sector health insurance—precisely the number that Jay Carney dismissed. As to the number of people facing cancellations, 51 percent of the employer-based market plus 53.5 percent of the non-group market (the middle of the administration’s range) amounts to 93 million Americans.

Either way, 50-100 million Americans losing their health insurance – and angry about it – is quite a bloc of voters to mobilize for the 2014 midterms.  If Republicans were able to get a fraction of this disenchanted group – coupled with the conservative base that votes anyway – it’ll be a landslide year for the GOP.  Obama’s legislative agenda will be dead.  At the very least, the bleeding would stop.

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