Three years after the Affordable Care Act (ACA) was passed and signed, significant new details about the law's provisions continue to drip out. This week WSJ reports that consultants have discovered that the law treats large and small employers very differently. Policies sold to individuals and small employers must provide extensive coverage (including hospitalization) whereas policies sold to companies with more than 50 employees only have to provide "preventive services" costing in the range of $40 to $100 per month. This cost is well below the $2000 penalty for failing to provide insurance.
The tradeoff for employers: a cheapo health plan will result in higher turnover and lost loyalty but maybe the cost savings make it worthwhile. One further complication: employers get dinged $3000 if a worker opts out of the cheapo health plan and buys an individual policy at one of the new exchanges.
Point to ponder: insurance companies are jacking up rates of individual and small group policies in anticipation of losing the ability to deny coverage for pre-existing conditions. Will the higher rates and the relatively small penalty for not being covered result in an outcome where ACA yields no increase in health insurance coverage?
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