February 11, 200917 yr http://online.wsj.com/article/SB123318915075926757.html The Entitlement Stimulus The more we dig into the pile of spending and tax favors known as the "stimulus bill," the more amazing discoveries we make. Namely, Democrats have apparently decided that the way to gun the economy is to spend even more on health care. This is notable because if there has been one truly bipartisan idea in Washington, it's that the U.S. as a whole spends too much on health care. President Obama has been talking up entitlement reform as a way to free up the money for his other social priorities. But it turns out that Congress is using the stimulus as cover for a massive expansion of federal entitlements.
February 11, 200917 yr In one swoop Democrats will make employer-sponsored health care even more expensive and expand opportunities for an anxious public to join, or remain on, the welfare rolls. The pretext of "stimulus" is being leveraged to capture ever more of the private health-care market and transfer those costs onto government. This scares me to death. Anyone who thinks that the Dems long term goal isn't a completely nationalized medical system has their head completely buried in the sand. Get ready to wait months for medical services.
February 11, 200917 yr Can someone explain how COBRA costs businesses 145% for employees using COBRA as it does for covered employees?
February 11, 200917 yr Because someone who is using COBRA benefits still counts on the companies rolls as a potential risk by the insurer so it pushes up the cost of premiums for everyone the company covers. Plus, people who utilize COBRA are more likely to be older and also more likely to utilize the benefits so the more COBRA recipients a company has on their rolls and the longer they are on them the more it will cost the company to insure it's active workers. My cousin works for a company that does payroll and benefits for other companies and she says that this has the potential to be a real nightmare for small businesses, so much so that many of them may stop offering health care as a benefit.
February 11, 200917 yr Can someone explain how COBRA costs businesses 145% for employees using COBRA as it does for covered employees? Average claims costs for COBRA continuees exceeded costs for active employees by about 45%, according to the 15th nationwide survey of employers’ and plan administrators’ COBRA experience, conducted by Spencer’s Benefits Reports. The 122 companies responding to the 2006 survey administered COBRA for 11,949 former employees and 1,421 dependents who elected the continued coverage. http://hr.cch.com/news/benefits/120506.asp
February 11, 200917 yr How would this make sponsored health care more expensive? A company's health insurance premiums are based upon the usage of its employees and COBRA participants. The most likely people to be on COBRA are those who need the coverage because they are being medically treated. This usually means that COBRA participants have a much higher usage than current employees. This drives the price of everyone's premiums up. I'm not sure that I buy into the argument that the company's cost goes up 45%, but I think I could agree that the premiums are that much higher.
February 11, 200917 yr A company's health insurance premiums are based upon the usage of its employees and COBRA participants. The most likely people to be on COBRA are those who need the coverage because they are being medically treated. This usually means that COBRA participants have a much higher usage than current employees. This drives the price of everyone's premiums up. I'm not sure that I buy into the argument that the company's cost goes up 45%, but I think I could agree that the premiums are that much higher. I still don't see how this will increase employer offered insurance costs. Is author saying that is will result in a higher number of people using COBRA? If so how? COBRA is being used now, this shouldn't really change that should it? The feds are just going to start picking up a majority of the tab, correct? Maybe I missed something in the article.
February 11, 200917 yr I still don't see how this will increase employer offered insurance costs. Is author saying that is will result in a higher number of people using COBRA? If so how? COBRA is being used now, this shouldn't really change that should it? The feds are just going to start picking up a majority of the tab, correct? Maybe I missed something in the article. From the article: Since Democrats want to boost participation by propping up Cobra use, that will result in less capital to invest in new jobs in the middle of a recession. It will also mean adding another disincentive (in addition to unemployment insurance) to get a new job. When you subsidize people not to work, you get more nonworkers.
February 11, 200917 yr From the article: Since Democrats want to boost participation by propping up Cobra use, that will result in less capital to invest in new jobs in the middle of a recession. It will also mean adding another disincentive (in addition to unemployment insurance) to get a new job. When you subsidize people not to work, you get more nonworkers. :ohbrother:Not sure how I missed that. Sometimes you got to draw it in crayon for me.
February 11, 200917 yr Average claims costs for COBRA continuees exceeded costs for active employees by about 45%, according to the 15th nationwide survey of employers’ and plan administrators’ COBRA experience, conducted by Spencer’s Benefits Reports. The 122 companies responding to the 2006 survey administered COBRA for 11,949 former employees and 1,421 dependents who elected the continued coverage. http://hr.cch.com/news/benefits/120506.asp Ironic
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