Health Care Bait and Switch

June 26th, 2010 by Lee Eldridge

Dr. ObamaOne of the points I made all along during the health care reform debate is that the current plan leads us down the path to a single payer, government run health care system. President Obama understands that a government run solution would never have passed Congress, so they backdoored a plan that would eventually create a single payer system. How? By making sure that businesses would be put in a situation where they couldn’t afford to comply with the new regulations and increased costs of health care coverage. The plan was never intended to reduce health care costs, but to increase them.

When President Obama said that Americans would be allowed to keep their coverage, he lied.

Many large firms including AT&T, Verizon and John Deere, have already explained how they may have to drop health care coverage for their employees. A tax change created in the new law will cost these companies millions of dollars, and it may no longer be economically viable for these companies to continue to provide health care coverage. (See this story from

But what came out in a recently leaked government document is even more disturbing. We had been promised that our health care coverage would be “grandfathered” in under the new law, allowing us to keep the policies currently offered by our employers. According to a joint project that is being prepared by the departments of Health and Human Services, Labor and the IRS, they have predicted that up to 51% of employers may have to relinquish their current health care coverage under the new law.

Why? Because most of these policies will lose their “grandfathered” status within the first few years.

The “midrange estimate is that 66% of small employer plans and 45% of large employer plans will relinquish their grandfathered status by the end of 2013,” according to the document. In the worst-case scenario, 69% of employers — 80% of smaller firms — would lose that status, exposing them to far more provisions under the new health law.

If a company makes even simple adjustments to their current plan, it is now considered a “new” plan and no longer subject to the “grandfathered” status. And all NEW plans must conform with the new government regulations, which will INCREASE the costs of the coverage. Just to give you some insight, 66% of small businesses and 47% of large businesses made a change in their health care plans last year that would have forfeited their grandfathered status. (See this story from IBD.)

So what do you think will happen when millions of Americans lose their health care coverage over the next few years? Don’t worry, the government will have a solution for us. It’s called government run health care.

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3 Responses to “Health Care Bait and Switch”

  1. Lee Eldridge Says:

    While I’m thinking about it, let me provide an example of how this works in the real world.

    With my old company, we provided health care coverage for our employees. A couple years ago we were looking for ways to improve our coverage, and reduce the costs. We were presented with an idea which would save us money, and reduce the premiums for our employees, while not reducing their benefits. Basically what we did was the we increased the deductible on everyone’s insurance policies, which reduced the price of the insurance. But then we paid for the change in the deductible directly.

    For instance, if the deductible went from $500-1000, we paid the first $500 of the employee’s cost directly. Their premiums went down. If the employee didn’t use the coverage very much, their out of pocket expenses went down too. Nobody paid more in out of pocket expenses than they had under the old plan.

    The intent to save us money came from the prediction that the savings from the premiums would more than offset our costs in paying off the difference in the deductible.

    But under the new health care bill, this change in policy would have removed our “grandfather” status, and forced us to purchase insurance that meets all of the new federal guidelines.

  2. Bobby Says:

    Seems to me that if all these companies drop their coverage we’ll have more uninsured people in a few years than we have now. Great job Obama.

  3. Lee Eldridge Says:

    Bobby, interesting comment. I’d had a similar thought as well. It wouldn’t take a very large percentage of businesses to drop health care coverage to create an even bigger crisis than we’re faced with now.