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July 31, 2014

Obamacare Could Create Big Savings for Companies

Neil Irwin comments on a new report that studies the impact of Obamacare on the American economy.

“By 2020, about 90 percent of American workers who now receive health insurance through their employers will be shifted to government exchanges created by the health law, according to a projection by S&P Capital IQ, a research firm serving the financial industry.”

S&P estimates that the biggest American companies could save “$700 billion between 2016 and 2025, or about 4 percent of the total value of those companies. The total could reach $3.25 trillion for all companies with more than 50 employees.”

And savings could trickle down to employees: “… employers might decide to give their workers a stipend to pay for health insurance on the exchanges rather than sponsor a plan themselves.”

Michael G. Thompson, managing director at S&P Capital IQ: “We think that this process can ultimately yield some big savings for companies and take the responsibility and burden for health care out of their hands.”

S%20%26%20P Obamacare Could Create Big Savings for Companies

Graph from The Fiscal Times.

  • Lorehead

    I actually think this would be a good thing, since the employer-based health-care system is an undesirable, unintended consequence of what was meant to be a temporary wartime measure. But it won’t be popular.

  • Jim Learn

    Seems to me that a lot of employers will gain the most. I don’t for see them passing on to much of what they save. maybe a few will give raises, some bonuses, but most will be put in their on pocket. Just say in….

  • ninetyninepct

    “And savings could trickle down to employees – ” oh sure, we will see that happen right after China and India stop polluting and pigs fly.

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