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If Employers Stop Paying Health Care, Who Wins? (Maybe, Everyone) (The Atlantic)

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Last year, a McKinsey survey found that 50% of employers with a “high awareness of (health) reform” would “definitely or probably” stop offering employer-sponsored insurance in 2014. A majority of those “dumped” employees who qualify for the exchange subsidy would probably find a better deal, but what impact will those people have on the deficit? The Congressional Budget Office modeled a scenario where employers dumped 14 million more people onto the exchanges and found it reduced the deficit by $13 billion from 2012-2022. How so? The generated tax revenue from people insured through exchanges who can no longer take advantage of the tax deduction for employer-sponsored health insurance. However, the CBO assumed that employers who dump health coverage would replace it with increased cash wages – dollar for dollar. It could mean much lower tax revenues if employers don’t decide to match.