By now most people have seen the report that 30 percent of companies will drop coverage in 2014 due to the PPACA’s regulations on insurance and businesses. The rationale is that it will be financially favorable to stop offering coverage and supplement an employee’s salary instead. This rationale has also been applied to the individual mandate wherein a consumer would rather pay the fine then buy coverage because it is financially favorable.
The PPACA has a number of provisions that will prove to be onerous, even detrimental, to business development in Texas and the nation. With the increasing acknowledgement on both sides of the aisle that a growing economy is the key driver of debt and deficit relief, the key issue of the day, the effects of these provisions warrant significant research.
This survey proves what many analysts have been saying for months, but more importantly it reminds us of the adage of supply siders like Dr. Art Laffer – incentives matter. Incentives truly do matter, and the PPACA incentivizes companies to drop insurance coverage.