When Trader Joe's announced it was dropping health benefits for part-time workers, it reassured them that they'd be no worse off as a result.
"We believe that with the $500 from Trader Joe's and the tax credits available under the (Affordable Care Act), many of you should be able to obtain health care coverage at very little if any net cost to you," noted CEO Dan Bane in a memo to employees revealed this week.
In other words, Trader Joe's — like some other companies — has decided to shift its health care costs onto federal taxpayers via the subsidized ObamaCare insurance exchanges.
The specialty grocer's move adds further evidence that ObamaCare will cost far more than the $1.4 trillion currently forecast, as businesses and governments find ways to transfer their employee health costs onto the federal government, and as millions of other workers find they can get a better deal in the taxpayer-subsidized exchanges.
A Moving Target
Earlier this year, the Congressional Budget Office predicted that 7 million workers will lose their employer-based coverage as a result of ObamaCare, forcing them into the exchanges. That was nearly double the CBO's previous forecast.
But recent evidence suggests the CBO's projection is still far too low. That would mean its cost forecasts also are far too low.
A survey by the National Business Group on Health found that 30% of large companies are considering dumping workers into ObamaCare exchanges after next year. Other surveys have found similar results.
Employers are also looking to drop early retiree coverage and spousal benefits to save costs. More than 60% said they're considering this for retirees so they can "take advantage of the law," an Aon Hewitt survey found.
Local governments, too, have been eyeing ObamaCare as a way to reduce their bloated pension costs. Chicago Mayor Rahm Emanuel unveiled plans in May to push 30,000 city retirees into the ObamaCare exchanges, saving the city $108 million a year.
Others are likely to follow suit, since doing so "offers a very high-quality, potentially very affordable way to get people into health care without the burden falling back onto the city and town," Neil Bomberg of the National League of Cities told the New York Times.
Should these governments do so, ObamaCare's price tag will climb even higher.
Meanwhile, a study published this week in the journal Health Affairs finds that 37 million workers could decide to quit their employer plans on their own because they can get a better deal through ObamaCare's taxpayer-subsidized exchanges.
Cheaper For Workers?
If all those workers did so, ObamaCare's costs would shoot up by $132 billion a year. And if companies boost their annual employee contribution levels by just $100, another 2.25 million workers could jump ship, adding nearly $7 billion more to ObamaCare's annual price tag.
Several other factors suggest ObamaCare costs will far exceed what the government promises.
Earlier this year, the Obama administration loosened the verification requirements that the exchanges must use to decide eligibility for insurance subsidies, increasing the potential for fraud.
"It has been estimated that as much as $250 billion of hard-earned American taxpayer dollars could be given out in fraudulent ObamaCare subsidy claims," said Rep. Diane Black, R-Tenn. Black championed a bill that would block ObamaCare subsidies until strict verification procedures are in place.
Subsidy Forecasts Surge
Projected subsidy costs have climbed. The CBO now figures ObamaCare subsidies for each eligible person will average $5,290 in 2014. That's 33% higher than the initial CBO forecast.
Also, to make ObamaCare look less costly on paper, Democrats who drafted the law employed gimmicks that won't likely last.
For example, ObamaCare caps overall subsidy costs at 0.5% of GDP starting in 2019. But staying under that cap would require steep cuts in ObamaCare subsidies for enrollees, which, as CBO director Doug Elmendorf said, "may be difficult to sustain.
Should Congress abandon that cap, actual ObamaCare costs will far exceed official forecasts.
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