Could the ACA end employer-provided health insurance benefits?

More than 8 million Americans received health insurance through the federal and state marketplaces. According to USA Today, President Barack Obama recently expressed his optimism about the success of the healthcare reform law at a White House press conference.

“The Affordable Care Act is now covering more people at less cost than most would have predicted just a few months ago,” Obama said. “This thing is working.”

With more Americans now having access to affordable health insurance benefits outside of their employers, Kaiser Health News reported many are reexamining their employment and benefits options. Some people are considering leaving their current positions and starting companies of their own, while others are opting to retire early. As the exchanges develop and more people become used to purchasing their own health coverage, an article in The New York Times suggested the ACA may create a shift in how many employers provide this type of benefits. Private companies could save billions by not providing health insurance benefits to workers, and many have already started shifting to this mindset. Will employer-paid health insurance soon become a thing of the past? And could public employers follow their private colleagues’ lead?

More people consider their employment options
Kaiser reported the ACA may allow those who are unhappy in their current positions to become self-employed or retire early because they are now able to gain affordable healthcare through means other than their employers. In fact, a study by Georgetown University and the Urban Institute found healthcare reform will allow 1.5 million people to leave their jobs. According to Kaiser, the ACA is already moving Americans who want to launch their own businesses to do so, as well as those who want to retire early.

Rebecca Murray, a Chicago resident and mother, told Kaiser she never thought she would be able to live out her dreams of starting her own businesses before the ACA. Mike Smith, a 64-year-old, said his retired wife relied on receiving health coverage through his employer, and he didn’t think they would be able to find affordable insurance on the open market to allow him to retire early. Smith and his wife did find affordable healthcare, however, allowing him to retire.

According to The New York Times article, the U.S. health system looks odd when one examines it from an objective perspective. If people change employers, why would they also have to change their health plans? This doesn’t happen for auto insurance or loans, so the article questioned why it should happen for just health insurance. While health insurance is often expensive and employers offer to cover part of the expense as an employment perk for their workers, the article suggested the government and individuals may soon be footing most of the bill for health coverage. If the government is already covering some Americans’ health insurance through subsidies, why would it stop offering benefits to workers? The government would still have to provide much of the cost of insurance.

The New York Times article noted this shift in employer-provided healthcare is occurring; however, there remain questions as to how it will look in the future.

“In a perfect world, lower costs would come from a more efficient system that provides better care at lower costs,” Neil Irwin, writer of The New York Times article, said. “But no one knows what the actual system of, say, 2025 will look like, any more than people could have foreseen the decline of pensions when the 401(k) option was added to the tax code.”

What is clear is that the entire healthcare environment is changing. From employers encouraging workers to receive health coverage through the exchanges to employees seeking out affordable healthcare on their own, employer-sponsored healthcare insurance benefits may start becoming rarer.