Inside Paul Ryan’s Health-Insurance Number

By Louise Radnofsky

ZUMAPRESS.com

Vice President Joe Biden, left, and Congressman Paul Ryan shake hands after the Vice Presidential Debate at Centre College in Danville, Kentucky.

Paul Ryan‘s closing statement included a claim that 20 million people are projected to lose their health insurance once the Obama health law takes effect.

That figure likely comes from a possible scenario mentioned deep into this March 2012 set of estimates by the non-partisan Congressional Budget Office that contemplates what employers might do after 2014 when many will be penalized for not providing insurance but can also look to new options such as subsidies towards the cost of premiums for private insurance or Medicaid coverage for low-income workers.

But it’s far from certain what will happen, and 20 million fewer people in employer-sponsored insurance is the most extreme number considered by CBO in its study. More likely, it thought, was that three to five million fewer people might get insurance through their employer each year from 2019 to 2022, and would instead get their insurance through exchanges, with the subsidies, or Medicaid.

There are several big variables for employers between now and then, including the future cost of health premiums relative to the penalty they’ll face for not offering coverage ($2,000 to $3,000 per worker), how well new exchanges function, whether they can find ways to get around the mandate to offer coverage to workers putting in 30 hours a week or more by giving more of them part-time schedules, and how much value prospective employees place on having insurance after they’re also required to carry it or pay a fee after 2014.

And there’s been another major change since March: the Supreme Court’s decision in June that effectively allowed states to decide not to expand their Medicaid programs to enroll all low-income childless adults. For employers with large low-wage workforces, that’s also an important factor in deciding what to do going forward, according to the employee benefits consultants.

Right now, no major employer has said it plans to drop coverage after the law fully takes effect. In anonymous surveys, around one in ten respondents say they’re thinking of doing it (and this response is more typical among mid-sized firms than the largest ones.)

Attention is now focused on the retail and restaurant sectors in particular, which have the lowest rates of employer-sponsored insurance right now, and have been loudest with concerns about penalties if they do not offer a set level of coverage.

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