- (Photo: REUTERS/Jim Young)
About 7 million people are expected to lose their employer provided health insurance when the Affordable Care Act, better known as "Obamacare," becomes fully operational, according to a Congressional Budget Office report.
The CBO's previous estimate, in August 2012, was that only 4 million people would lose their employer provided health insurance. The higher estimate is due to the "fiscal cliff" bill that kept taxes low for many. More businesses are now expected to see a greater financial benefit from paying the tax penalty than providing their workers with health insurance.
"If you like your health insurance, you can keep it," President Barack Obama claimed in many stump speeches as he was selling the ACA to voters.
While it is technically true that the ACA does not force anyone off their current insurance, it does have the impact of encouraging employers to no longer offer health insurance.
Once the ACA is fully implemented, workers who do not get health insurance from their employers will be able to buy government subsidized health insurance from state based health care exchanges, or they can pay a tax for not carrying health insurance.
In the Supreme Court's decision last summer on the constitutionality of the individual mandate to purchase health insurance, the court said Congress has the authority under its taxing power because the penalty for not purchasing health insurance is a tax.
Now that the cost of not buying health insurance is considered simply paying a tax, rather than breaking the law, the Supreme Court has removed a stigma attached to not obtaining health insurance, David Rivkin and Lee Casey pointed out in a December 2012, article for The Wall Street Journal. As a result, they expect more people to opt to pay the tax rather than obtain health insurance. They also expect this lack of a stigma to extend to employers.
"There is certainly no stigma attached to simply paying a tax, and noncompliance with the law's other requirements -- such as those imposed on employers -- is arguably made more attractive on the same basis. This effect fundamentally undercuts Congress's original purpose, which was to expand health-care coverage to the greatest number of people, not to improve federal revenues," they wrote.