Now that Obamacare exchanges are active and taxpayers are taking on the cost of insuring millions of Americans, some companies are looking into whether they can dump their sickest, costliest employees on them, according to Kaiser Health News.
“Such an employer-dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large,” two University of Minnesota law professors wrote in a 2010 paper.
Now companies are trying to move towards that model, according to health benefits consultants.
“Employers are inquiring about it and brokers and consultants are advocating for it,” Todd Yates, a managing partner at North Carolina benefits consultant Hill Chesson & Woody told KHN.
The system, which law experts believe is legal, would allow companies to purchase exchange health insurance for employees. The highest-level platinum plans can cost over $6,000 per year — but especially large companies that are self-insured may incur hundreds of thousands of dollars in costs to care for one employee with an expensive illness.
Another consulting company, Benefit Controls, had a note of caution for its clients and is not promoting the strategy.
“Though we believe its legal,” said Benefit Controls vice president Matthew McQuide, “it’s still gray. We just decided it wasn’t something we wanted to promote.”
If companies opt to do this, it could leave Obamacare exchanges with even more disproportionately sick customers — which would cause participating insurers to control costs for patients they can’t turn away by narrowing their provider networks and raising premiums for all customers.
Early reports from Obamacare customers that signed up in the first five of six months of open enrollment indicated that the exchanges already included more ailing customers than the rest of the insured population. (RELATED: Obamacare customers could be sicker than the rest of the country)
Top pharmacy benefits company Express Scripts found that exchange patients, through the end of February, take specialty medications at a 47 percent higher rate than those with private health plans.
Kaiser Health reported that many benefits consultants aren’t recommending the strategy, noting that it’s “bad public policy.” But while it may be inadvisable, many consultants believe shunting expensive employees to the exchange is legal under existing Obamacare regulations.
The plan wouldn’t violate the twice-delayed employer mandate as long as employers continue to offer affordable health insurance to all employees, and workers who are shifted to Obamacare exchanges do so willingly.
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