Workers Nudged to Health Exchanges Seen Costing U.S. Taxpayers

 by: Alex Wayne September 12, 2013

(Bloomberg) — U.S. retirees being pushed out of company-sponsored health plans may prove a harbinger for existing employees as well.

About $6.7 billion in taxpayer money may be at risk if companies raise premiums by as little as $100 a month. That may spur as many as 2.25 million people to drop company coverage and enroll in plans under the Affordable Care Act, Stanford University researchers say.
International Business Machines Corp. and Time Warner Inc. say that they’ll give retirees a stipend to move to coverage in private health exchanges. Rising health care costs and the availability of new government coverage options may spur companies to similarly shift active workers out of employer-sponsored insurance.
The cost of the ACA “is much more sensitive than people previously appreciated” to employers’ decisions to drop coverage, says Jay Bhattacharya, an economist and Stanford associate professor of medicine. He published a study in the journal Health Affairs this week that shows about 37 million workers would get a better deal in the taxpayer-subsided exchanges next year than through their companies as employers raise or redistribute health costs.

Health Insurance Exchange