Monday, December 07, 2009

Rip Van Winkle: Employer Sponsored Health Insurance

Who knew employer provided health insurance would conduct a Rip Van Winkle? One could have sat down at the base of a tree for a nap in 1998, when employer coverage stood at:

1998--168.5 million

Twenty years later they could awaken to find a similar number (Center for Medicare/Medicaid projections--House bill):

2019--168.4 million

During that time the population would grow over 110 million people. Despite huge population growth, employer coverage will drop by 100,000. This clearly shows the plan.

Employers want to do less, which leaves the worker or the government to do more. The government talks a good game, but military veterans heard commitments that were later reneged. A tapped out Uncle Sam will likely welshing on any current commitments.

Government accounting changes will accelerate the shift of responsibility to the individual. GASB requires government units to treat their health insurance benefit like a pension. They want employers to capitalize projected long term health insurance costs and fund them. Why do this with health insurance and not other operating expenses, like payroll, supplies or rent?

Accounting standards are open to agendas and manipulation. A Congressional hearing on fair value accounting was instructive. Rep. Randy Neugebauer threatened FASB's chief, worthy of a scene in a Mafia movie. Randy told the accountant:

"Don't make us tell you what to do. Just do it. Just get it done."

Accounting tea leaves show employers doing much less in the coverage arena come 2019. Only 42% of Americans would have workplace coverage under CMS projections. This is down from 64% in 2000. If employers do less and governments are tapped out, responsibility falls to you. That's one reason for the individual mandate.

The more things change, the more they stay the same.

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