With the latest Supreme Court decision in June 2015, it now appears that Obamacare is here to stay in America. The latest decision concerned the Federal government’s right to provide subsidies to lower-income people, which was critical to Obamacare’s future since most of the people who are covered by Obamacare insurance plans are subsidized.
While Obamacare has created exchanges for people to purchase insurance, its major impact will be in the years to come. Premiums will rise because the number of healthy people applying for health insurance hasn’t been as high as predicted.
As for companies, record-keeping requirements will begin in 2016 as the value of health insurance must be reported to the IRS. Companies with very generous health insurance programs will need to consider the impact of the “Cadillac” tax in 2018, which might force them to reduce health coverage or increase premiums to employees. The irony of the “Cadillac” tax is that labor unions, who mostly supported Obamacare, may be forced to reduce the quality of their health insurance for their executives and staff since they’ve had the benefit of expensive plans for many years.
In addition, the value of health, dental and vision coverage has been a tax-free benefit for employees for years. That could change as the costs of Obamacare rise due to subsidies and administrative overhead. It’s likely that health insurance could be subject to income taxes above a certain level, making it more attractive for companies to consider eliminating health insurance as a benefit.
As for the average citizen, the cost of the extensive subsidies will inevitably lead to higher premium costs and higher deductibles and co-pays. Wait times for doctor visits will increase, smaller hospitals will close and medical care will be more impersonal. For example, Ezekiel Emmanuel, one of the architects of Obamacare, noted during a recent speech he expects thousands of hospitals to close. He also noted that diagnosis of certain problems like skin cancer may require patients to take a picture for evaluation by medical technicians overseas rather than in a local doctor’s office. There’s already evidence that people will search for “concierge care” to avoid delays in medical exams. Under “concierge care”, a person pays a specific doctor a certain annual fee for unlimited and quick access to care. This is expensive, usually $3,000 or more per doctor, but it gives people the luxury of getting an early diagnosis for a more successful treatment.
It’s possible the Republican Congress can still alter some of the provisions of Obamacare but its future has been secured. The only thing uncertain for most Americans is whether they’ll have access to the convenience and quality of health care they’ve had in the past and how much more they’ll have to pay.
Cash compensation may become much more important in attracting talent as companies consider whether they’ll continue to be the chief source of health care for their employees.