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August 22. 2013 12:17AM

Speaker: Employer-sponsored health-insurance system isn't economical

SALEM — The forum hosted by the Americans for Prosperity Foundation-New Hampshire on Wednesday drew about 40 people to the Tuscan Kitchen.

Avik Roy, a senior fellow at the Manhattan Institute and editor of the health care blog The Apothecary, said there are many common misconceptions about the pending legislation.
Roy estimated that state-run insurance would expand by 33 percent within the coming decade, while individually purchased coverage will increase to 11 percent.

"The employer-sponsored system isn't economical," he said. "Basically, the tax subsidy is already as large as Medicaid."

As it stands, the employer-sponsored health care system costs the federal treasury about $400 billion a year, since co-pays are typically taken out of employee salaries and aren't subject to taxation, according to Roy.
Right now the average cost of an American health insurance policy is significantly higher than the per- capita costs in countries that have a universal health coverage system. In 2010, the American government spent an average of $4,000 per capita on health care compared to $2,857 in the United Kingdom and $2,158 in Canada.

Roy said the primary driver of high American healthcare costs isn't the insurance companies, but the medical providers.

"Hospitals have been consolidated and as they result, they're making a market concentration," he said.

Right now, Americans under age 40 comprise about two-thirds of those uninsured.

"They're healthy and go to the doctor maybe once a year," he said. "They don't want to pay $3,000 a year for services they don't need or use."

As of July 1, 2015, Obamacare will make it mandatory for companies with 50 or more full-time workers to have insurance coverage or be subject to serious financial penalties.

"One avenue many employers may opt for is limiting family coverage because they're not obligated to do so," Roy said.

Other consequences of the AFCA could be a likely reduction in companies' full-time workforce.



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