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Health care reform law to reduce employer coverage: Analysis


The number of people enrolled in employer-sponsored plans will actually decline slightly when the new health care reform law is implemented fully, according to a federal agency analysis.

By 2019, 164.5 million people will be enrolled in employer plans when the law is fully implemented. That compares with 165.9 million people, or 1.4 million more, than if health care reform had not become law, according to the Centers for Medicare & Medicaid Services’ Office of the Actuary. Currently, about 163.8 million people are enrolled in employer-provided plans. The analysis was requested by congressional Republicans and was released Friday by Rep. John Kline, R-Minn., ranking member of the House Education and Labor Committee.

About 13 million employees and dependents will gain coverage by 2019 due to a variety of factors, including a greater proportion of employees opting for coverage from their employers and a requirement that group plans extend coverage to employees’ adult children to age 26, the report noted.

On the other hand, about 14 million people will lose employer-provided coverage due to a variety of reasons, including more low-wage workers moving to an expanded Medicaid program and some employers, especially smaller companies and those with low average salaries, being “inclined to terminate” coverage, the report said.

Terminating coverage could be financially attractive to employers and to low-wage employees eligible for “heavily subsidized coverage” through new state health insurance exchanges, according to the report.

The annual $2,000-per-employee penalty imposed on employers for not offering coverage starting in 2014 is “relatively low compared to prevailing health insurance costs. As a result, the penalties would not be a sufficient deterrent to dropping” coverage, according to the report.

On the other hand, enactment of the reform legislation will dramatically reduce the number of uninsured. The CMS’ Office of the Actuary projects that 23.1 million people will be uninsured in 2019 compared with 56.9 million had the legislation not passed. In 2008, about 46 million people lacked health insurance, according to the U.S. Census Bureau.

By 2019, 31.6 million people will receive coverage through state insurance exchanges, according to the report.

In addition, Medicaid and Children’s Health Insurance Plan enrollees will climb to 83.9 million by 2019, up from the current 59.2 million enrollees, according to the report available at