CBO: 7 million will lose employer-paid insurance under Obamacare

The non-partisan Congressional Budget Office now projects that 7 million people will lose employer-provided health insurance by 2022 as the federal health reform, known as the Affordable Care Act, takes root. That estimate is up from 4 million that the CBO projected in a study last summer. Even with the change, however, the office still expects the new law to reduce the number of uninsured in America by 27 million. The biggest reason for the jump in the number of people who might lose insurance on the job? Last year’s estimate assumed income tax rates would increase across the board on Jan. 1 when the Bush-era tax cuts expired. But a compromise reached on New Years Day made those tax rates permanent for people earning less than $450,000. And that effectively made employer-provided health insurance less attractive for both workers and employers. Since insurance premiums paid by employers are tax free, those premiums are more valuable as taxes increase. With taxes staying relatively low, the CBO now says that more employers are likely to drop insurance and direct their workers into the new health exchanges, where many will qualify for subsidies. To see a little more detail, see page 62 of the CBO study here.

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