The nation’s employers could save a whopping $3.25 trillion over the next decade by shifting most of their employees from workplace health plans to the public exchanges.
That’s according to an S&P Capital IQ report that notes government subsidies and individuals themselves would be left to pick up the tab.
The S&P 500 alone, it said, could save $700 billion through 2025 – potential savings that represent 4 percent of those companies’ market capitalization.
Likening it to the shift of employees to their own retirement accounts, the financial information provider said it believes the Patient Protection and Affordable Care Act will result in “profound, and possibly unintended, consequences for corporate America, the average U.S. employee, and more broadly, the entire U.S. economy.”
Whether employers will actually shift workers off their plans has been a big question for some time. Beyond addressing the bottom line, nowhere in the report does S&P Capital IQ try to wrestle with the business or moral implications of such a move. It also says nothing about the notion of pay raises or stipends employers might have to offer to soften the blow of ending coverage.
Many in the human resources business believe cutting off benefits will leave corporations at a competitive disadvantage, in terms of recruitment and retention.
On that point, S&P Capital IQ said only that a move away from employer-sponsored health care creates an opportunity for companies to use health care coverage as a recruitment tool, “as opposed to an expected or assumed benefit of employment.”
Individuals also could benefit, it said, because with more people buying insurance, coverage should become more affordable. PPACA advocates say the same thing about the law, though few believe premiums next year will rise at appreciably lower rates.
It also touted the advantage of “widespread portability of benefits, allowing an individual to maintain preferred care givers and benefit coverage terms in the event of changing employers over the course of an individual’s career.”
On the flip side, the report did acknowledge these “improvements” could come at a cost.