Healthcare And COBRA: Employers Pass The Buck On Healthcare Costs

By Richard West on September 3, 2010, 2:27 pm

COBRA was a subsidy that helped Americans keep their health care coverage during the early days of the Great Recession. The federal government paid 65% percent of a former employee’s group insurance premiums. The remaining 35% came out of the persons own funds, often their own unemployment check. Employers managed to dodge a bullet on this one, but have they found a way to pass the buck on health care costs?

Did They Or Didn’t They

Employers generally will find a way to either pass the cost onto consumers or find ways to reduce the costs they pay for employing people. The new law forces all employers to provide health care insurance to their employees, whether or not the business can actually afford to pay for the coverage. Although the law has not gone into effect yet, analysts believe that the new rules will not lower the current unemployment rate and only serve to make employment processes work. While the law may mean that employed people have insurance, it generally means that the number of unemployed people will remain high.

 

The Effects of Health Care Costs on Consumers

Basic economics dictates that companies must find a way to make a profit. If costs go up, so will prices. The current climate makes this lead to a vicious cycle where the amount of unemployed people continues to rise while the amount of money in the economy continues to go down. The spiral can become dangerous unless the situation stabilizes. At the moment, the unemployment rating is creeping up to 10%, but it has not risen above it yet. The outcomes of the November elections may cause consumer and employer attitudes about the state of the economy to change, but during the meantime consumers and employers do not think that Obama is doing anything good for the economy.

Related posts:

1. Unemployment Extension Checks: The Latest On COBRA Insurance Subsidy
2. Health Care Insurance Costs Rising And Will Keep Going Up
3. Unemployment Extension And COBRA Health Insurance: Latest Summary
4. COBRA Health Ins: What It Now Means To The Unemployed & Jobless
5. COBRA Extension Excluded In Unemployment Leaves 2M More Uninsured