Drastic changes to employee health care plans are underway ahead of the implementation of the Affordable Care Act.
Walgreen Co. (WAG), the nation’s largest drugstore chain, told its 160,000 employees Wednesday that their health care benefits are changing. The company is moving workers to a private health insurance exchange, one that “provides more health coverage choices and an opportunity for most employees to lower their out-of-pocket health care costs next year,” according to a press release. Walgreen employees will be given a cash subsidy that allows them to purchase their coverage directly from carriers.
“We will continue to invest in the health of our employees and their dependents while using a marketplace solution that offers a wide variety of plan options that meet the affordability standard of the Patient Protection and Affordable Care Act,” said Kathleen Wilson-Thompson, Walgreen senior vice president and chief human resources officer.
Private employer exchanges will likely resemble the public insurance marketplace that was created as part of President Obama’s landmark Affordable Care Act. Walgreen’s decision to amend its company-backed health program is not unique: IBM (IBM), Darden Restaurants (DRI), Time Warner (TWX), UPS (UPS) and Sears Holdings (SHLD) have also disclosed new policies in response to the legislation.
GOP lawmakers are making a huge mistake by actively trying to strip federal funding for the Affordable Care Act, says The Daily Ticker’s Henry Blodget in the accompanying video.
“It’s ludicrous that employers provide health care coverage,” he argues. “The government is in a better position” to provide health care to citizens and has more leverage over insurance companies to keep health costs down.
“Health care costs were exploding long before ‘Obamacare,’” Blodget adds. “It may now be in fashion to blame Obama for [higher costs]…but health care costs have been going up at a slower rate since 'Obamacare' was implemented.”
A new analysis by the Department of Health and Human Services found that 56% of “eligible uninsured” Americans – or 23.2 million people – will have access to low-cost insurance coverage options through their state exchanges or Medicaid because of the Affordable Care Act. These Americans could pay $100 or less per month for coverage next year. More than a dozen states, including New York, California and Oregon, say their residents would see steep drops in the price of health care coverage plans. All Americans are now required to obtain health insurance by next year or pay a penalty.
The Daily Ticker’s Aaron Task says the shift away from employer-provided insurance to public and private exchanges could have a detrimental impact on the nation’s finances.
“My concern is that more companies are going to do what Walgreen is doing – which is the rationale thing,” he notes. “But that will put more pressure on the U.S. government to provide health care when we're already facing a huge long-term challenge to pay for Medicare. Unless there's a sea change in the political environment — and a willingness of Americans to pay higher taxes to fund national health care -- this could lead to a true government budget crisis versus the false alarms of recent years.”
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