Based on this article: http://online.wsj.com/article/SB10001424052702304510704575562643804015252.html
This article, written by the governor of Tennessee, explains how business can benefit by discontinuing their corporate healthcare and moving employee coverage to the federal government. The newly approved Patient Protection and Affordable Care Act (also referred to as Obamacare) is set to take effect in 2014. While much effort went into designing this bill, Bredesen believes the government failed to take into account the possible actions of employers. Currently, the employers in the state of Tennessee spend about $346 million on existing insurance plans. If they were to move to the Obamacare plan, they would save around $146 million. While this is great for the businesses, and may even benefit some of the employees, it will be very detrimental for the government.
The new “exchanges” – organizations offering health insurance which is extensively subsidized by the federal government – were designed to benefit lower and middle class individuals who did not receive healthcare from their employers and were being overcharged or opted out of any healthcare. Based on this, estimates were calculated to determine how much of a subsidy could be granted at various income levels. The government did not take into account the possibility of employers removing their programs to save money, thus adding a potential of 170 million additional people to the subsidy-sponsored exchange organizations.
The American government may not be able to afford an additional entitlement program (Obamacare), but the influx of additional people into the federal healthcare system has the potential to bring our deficit to unprecedented heights. This new healthcare bill will affect all Americans, not only because it will affect the overall financial stability of the government, but also because it may force employees to switch to the exchange system against their will. The retired generation is not immune from this issue. Until they reach the age of 65, employers provide their healthcare, and with the great incentives provided by subsidies, a major shift to the exchanges may occur soon.
The broad influence of Obamacare makes it a beneficial topic for discussion across all generations. It will primarily influence the young generations because they will be left with any resulting deficit, but it will also have very important implications for older generations because they will more likely see the most change in the coming years since they are more likely to be using services offered by healthcare.
