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Does Obamacare cut out spouses?

By Jay MacDonald · Bankrate.com
Tuesday, August 27, 2013
Posted: 6 am ET

It didn't take long for opponents of health care reform to light up Facebook last week following the announcement by shipping giant United Parcel Service that it plans to cut from its employee health plan thousands of working spouses who are eligible for coverage through their own employer.

Employers pin some blame on Obamacare

According to Kaiser Health News, UPS issued a memo to employees that rising health insurance costs, "combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost."

The University of Virginia made a similar announcement last week, stating that beginning next year, it will no longer offer health coverage to spouses who have access to a "minimum value" and "affordable" coverage, as defined under health care reform.

UVA spokesman McGregor McCance told The (Charlottesville) Daily Progress that the move was necessary to rein in growing medical costs and allow the university to focus on preventive care for its employees. Total medical claims at the university grew 28 percent, from $99 million to $127 million, between 2008 and 2012. Administrators are braced for costs to rise 6.8 percent next year, including by $7 million to implement health care reform.

UPS spokesman Andy McGowan said the Affordable Care Act is "one of the reasons that UPS is implementing the changes." The company singled out the expense of two provisions of the ACA: a research fee of $1 per plan member (it eventually rises to $2); and a temporary fee of $63 per member that goes toward stabilizing the new state health marketplaces.

Announcements meet some skepticism

But experts like MIT health economist Jonathan Gruber point out that the ACA has relatively little impact on the health care costs of large employers, many of whom are self-insured.

"The notion that those (spousal moves) are going to be make-or-break when (the employers) are otherwise absorbing 7 (percent) to 10 percent a year (in broader health-cost increases) is kind of ridiculous," Gruber told KHN. "Nobody expected the ACA to have a major effect on health costs for large firms."

A survey of employers by research firm Towers Watson found that just 4 percent of employers refuse spouses who are eligible for coverage elsewhere, while 8 percent are considering the move in the coming year.

Tracy Watts, national health care reform leader at Mercer, a global research and consulting firm, says such moves, while still rare, reflect a growing trend among some large employers.

'Kitchen table' conversations

"A lot of employers are really increasing the amount that an employee has to pay for employee-plus-spouse or employee-plus-family coverage," Watts says. "The idea is, when you and your spouse sit down and compare plans at the kitchen table during open enrollment, employers are now starting to think they want the spouses to go to their own plan."

In fact, Watts say some companies are trimming their plans to bare bones precisely to avoid winning that kitchen-table comparison.

"The richer (an employer's) benefits and the more they subsidize them, they're going to be a magnet for those spouses and dependents. Right now, you might have people opting out and going with a spouse's plan but, depending on how much you change your benefits for 2014, some people might come back in," Watts says.

What do you think? Is Obamacare the cause or the potential cure for this latest twist in employer-based health plans?

Follow me on Twitter: @omnisaurus

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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.

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13 Comments
Dr M. Oz
October 17, 2013 at 3:03 pm

Teresa for Christ 's sake get back on your meds. Mr Fubo, don't forget that there are aliens out there and they probably have something to do with this too.

John
October 17, 2013 at 2:40 pm

hey Chuck Hatter:
You must not have health insurance or haven't look at your new bill. If your insured, your rates will go up and it is due to Obamacare. Someone's got to pay and it is the ones insured that pay for those who don't. Or is this just another redistribution of wealth again

Chuck Hatter
October 09, 2013 at 7:48 pm

Lets face up to the fact that we are moving toward a single payer system for health care. Those who believe that the ACA is socialism get up to date. We already have socialized health care:
i.e., the VA. Government owned, run by and staffed by the government. Expect a 4.5 to 6.5 % Federal tax on income to support healthcare. It is in the near future

Chuck Hatter
October 09, 2013 at 7:38 pm

What a bunch of cry babies. You just don't get it. Healthcare costs are rising but not because of ACA. Hospitals and doctors account for most the cost of healthcare The US spends almost twice for healthcare when compared to other Western countries and yet the outcomes in the US are far below other countries. Payments to doctors and facilities should be based on outcomes and not on repetitive tests

Teresa
October 04, 2013 at 5:40 pm

Just put me in a FEMA CAMP already, where I know my death will be quick 1-2 days top. America is no longer, and I know my fore-fathers are rolling over in there graves watching this once Great Nation being taking over by Agenda 21. Thanks to you Barack Obama and all the other illuminate or what ever you call yourselves. I hope there really is a HELL for you to spend eternity in. For this country will never have peace until all of you are in HELL.

msbetz
October 02, 2013 at 7:04 pm

Obamacare is NOT about your health coverage, it's the GLOBALIST attempt to overturn the Republic and it Constitution. Don't be fooled the "banksters" want to rule the world and America is the last strong-hold against their Communist plot to RULE the world with a total DICTATORSHIP....their New World Order.....Starting with "the family"

http://www.heritage.org/research/reports/2010/01/the-new-federal-wedding-tax-how-obamacare-would-dramatically-penalize-marriage

Bob
October 01, 2013 at 6:45 pm

The ACA is definitely the catalyst for businesses dropping employee health benefits. While it is not any particular wording in the ACA, there is enough confusion coupled with new alternatives to make this a cost savings opportunity not to be missed. I expect corporate profits to go even higher along with our federal debt (this ship is not being piloted by a bunch of fiscal geniuses)

Miss Matson
October 01, 2013 at 4:06 pm

Mr fubo. Get a grip. Government employees do not need Obamacare , they already have health care. It is forgoes who need it. Like me.

Why do you think it is destroying anything? It has not even started! How could it have?
I think you might possibly try looking at a few different sources of news

Judy Main
September 04, 2013 at 7:02 pm

What is wrong ? Did anyone have the guts to print what I said!

Mr. Fubo
August 28, 2013 at 3:30 pm

Obamacare is DESTROYING AMERICA.

And all those who want to argue that point, FIRST explain why Barack Hussein Obama has:

exempted thousands of large businesses and unions;

done a back-room deal to pay the premium costs for CONGRESS AND THEIR STAFFERS;

And why the IRS employees union, which is going to enforce this gabage have screamed that THEY don't want to participate in obamacare.

Right thinking Americans should go to http://www.dontfundobamacare.com and sign the petition to defund it and DESTROY IT.

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