• Chart of the day: Uninsured workers overwhelmingly cite cost as reason

    From an ungated EBRI Fast Facts PDF:

    ebri why uninsured

    This chart is particularly interesting in light of news that the Administration is considering extending subsidies to Taft-Hartley plans, which already benefit from the preferential tax treatment of employer-based health insurance. Without passing judgement on the legality, wisdom, or justice of such a move, it would clearly make such plans more affordable. And, per the chart above, affordability of employer-sponsored plans is a significant issue, their tax exclusion notwithstanding.

    More from Avik Roy:

    The issue at hand is the way Obamacare affects multi-employer health plans, also known as Taft-Hartley plans. These plans consist of employer-sponsored health insurance that is arranged between a labor union in a particular industry, such as restaurants, and small employers in that sector. Approximately 20 million workers in the United States are covered under such arrangements, including 800,000 of the 1.3 million members of the United Food and Commercial Workers International Union, whose leader, Joseph Hansen, signed the letter I described above.

    Workers with employer-sponsored coverage don’t qualify for subsidized coverage on Obamacare’s insurance exchanges. Those subsidies are designed for low-income people who aren’t offered coverage from the employers, and have to shop for insurance on their own. But the labor union leaders want those subsidies to also apply to their members with employer-sponsored coverage, even though they already get those benefits tax-free due to the employer tax exclusion for health insurance.

    @afrakt

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    • I’m not sure why it matters where a subsidy takes place. I presume workers who can’t afford or don’t want their employment-based insurance can go to the exchanges and get subsidies there? If so, and if plenty of workers will do that, why wouldn’t the union be happy that they have one less responsibility to take care of for their members.

      Or is it that union membership is also viewed as too expensive and health insurance is a reason why many members maintain their union memberships?

    • Reminds me of that character who ran for mayor of NYC a few years ago on the slogan “The rent is too damn high”.

      It seems obvious, “Health insurance costs too much”. Of course, this reflects the fact that health care in the US costs too much (compared to every other country).
      See the recent Bloomberg study for the ugly details:
      http://www.huffingtonpost.com/2013/08/29/most-efficient-healthcare_n_3825477.html

    • Thanks for sharing this. The numbers really don’t surprise me, though, I have to say since I have been looking at numbers like this for years, and surveys have shown this to be true for years — that the uninsured say that cost is the main reason they are uninsured. I don’t find this particularly surprising, especially as health insurance premiums have risen. A couple points about this though, and related to the point Avik Roy makes. First, when a person says something “costs too much” that could mean two things of course. Either they cannot afford it given their income but they really want it, or they don’t want the good no matter what the price. The real issue is what is the willingness to pay relative to the premium, and their ability to pay. Some people may be very healthy or myopic and may not value health insurance much and even if insurance is a few hundred dollars won’t buy it even if they can afford it. My view though is that most of the uninsured fall into the category of wanting the insurance but having affordability issues. I say that because I have paired this question in surveys with people’s incomes, and we know that the vast majority of the uninsured have low to moderate incomes. There are other ways to look at the question, but this is one way.

      As for Avik Roy’s point, I suppose one can complain about this aspect of health reform, but I am suspicious. Many people making this point are well-known critics of the ACA on this and many other aspects, and if the ACA had made the Exchanges available to employers in this way, then I am certain the criticism would have been — the ACA is destroying the employer-sponsored insurance system! We know that criticism has been made anyway, and it would be made even further if more employers were allowed to opt in. So frankly, folks, I am very wary of such criticisms.

    • Two comments:

      a Are there really 20 million workers in Taft Hartley plans? I did not think there were 20 million union members in the private sector total.

      Maybe the 20 million counts all spouses and children who are covered.

      b. To my knowledge, most union health insurance plans have low deductibles and no age rating. (that is why they may become vulnerable to the ;’Cadillac tax.’}

      If that is true, then the exchanges will be a real step down for many union members A 55 year old smoker with no kids and a $65,000 family income gets almost no subsidy, and his premium will be very high. Even a 30 yr old single male making $30,000 a year gets a subsidy on only $507 a year, and the policy he gets may have a $2500 deductible.

      I am not saying that employers will not try and shift workers to the exchanges. I am saying it may be a bitter strike issue.

    • I really don’t understand how they can ask for subsidies.
      The ACA was designed to insure people that do not have coverage. It was not designed to subsidies employer sponsored benefits.
      Even on the small group SHOP plans, the tax credit is on a sliding scale.