Clipboard: Federal health law could weaken link between job and insurance plan

New health care subsidies created under the Affordable Care Act could prompt about 900,000 people to leave their jobs because they are no longer wedded to the insurance plan offered by their employer, American Public Media’s Marketplace reporter Dan Gorenstein reported Monday.

A report released by the National Bureau of Economic Research looked at what happened when the state of Tennessee cut 170,000 people from its Medicaid program. About half found coverage through an employer. The opposite could happen under the Affordable Care Act, Gorenstein said, because, for some, “the option of subsidized insurance is better than work.’’ He reports:

Economist Joe Antos with the American Enterprise Institute says this is a kind of test for the Affordable Care Act.


“If we see over time, that people do in fact migrate from employers, then that’s a pretty good indicator that things worked out well,’’ he says.

Antos says leaving a job behind is a sign there are affordable insurance options out there. But he says it also means so-called able-bodied adults will get taxpayer subsidized health coverage, when they could be at work.

Leaving a job behind also may be a sign of an empowered worker. In some states, competitive bidding like that in place in Massachusetts’s insurance market for individuals could make plans more affordable for even those consumers who don’t qualify for a subsidy.

Lower costs and more information about just what they’re buying may relieve some people who feel stuck in a dead-end job, dreaming about a freelance career or plotting a start-up company, of the fear of losing employer-sponsored coverage.

But, Tracy Jan of the Globe staff reported in May that, in the 34 states where political leaders have chosen to allow the federal government to run the exchange, many of those cost control measures will be omitted. Jan wrote:

[The federal government] will not conduct competitive bidding, nor will it require that plans contain the same features so consumers can make easy comparisons.


The federal rules took shape amid an intensive lobbying campaign by the insurance industry, and advocates say the result was a weakening of the law’s basic goal of giving consumers a simple way to shop for health insurance.

“The insurance companies want the exchanges to be weak. They don’t want the exchanges to negotiate with plans, to establish a competitive bidding process, to standardize the benefit package,’’ said Jay Angoff, former director of the administration’s newly created Office of Consumer Information and Insurance Oversight who is now a Washington-based attorney focused on health insurance. “They want to be able to sell whatever policies that meet the minimum standards of the statute and to charge whatever they want.’’

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