An untold number of employees will discover that they can’t keep their plan, especially if they’re a high-risk, high-cost employee. The Obama administration estimated that as many as 93 million Americans will lose their existing coverage under the new law, despite what the president promised repeatedly. We wrote about “targeted dumping” back in 2011. Those concerns are now being realized:
Can corporations shift workers with high medical costs from the company health plan into online insurance exchanges created by the Affordable Care Act? Some employers are considering it, say benefits consultants. “It’s all over the marketplace,” said Todd Yates, a managing partner at Hill, Chesson & Woody, a North Carolina benefits consulting firm. “Employers are inquiring about it and brokers and consultants are advocating for it.” Patients with preexisting medical conditions like diabetes drive health spending. But those who undergo expensive procedures such as organ transplants are a burden to the company as well. Since most big corporations are self-insured, shifting even one high-cost member out of the company plan could save the employer hundreds of thousands of dollars a year—while increasing the cost of claims absorbed by the marketplace policy by a similar amount. And the health law might not prohibit it, opening a door to potential erosion of employer-based coverage.
The workers most likely to be subjected to this strategic abandonment are older and sicker individuals; in other words, they come with the highest price tag from an insurer’s perspective.