The House Ways and Means Committee has released a new report that sheds light onto how Obamacare incentivizes companies to dump their workers onto the new law’s subsidized exchanges. As I have written many times, there are fiscal reasons to be concerned about this problem. But employer-sponsored health insurance is one of the most problematic features of the U.S. health-care system, and Republicans who lash themselves to the employer-sponsored mast, for short-term political gain, will undermine long-term efforts at market-oriented reform.

The Ways and Means report, prepared for chairman Dave Camp (R., Mich.), surveyed companies in the Fortune 100, receiving 71 timely responses. The survey asked Fortune 100 CEOs how many full-time and part-time employees they had, and how much they spend on health insurance for those workers, among other questions. Based on this data, the Ways and Means staff calculated that these 71 companies could save $28.6 billion in 2014, and $422.4 billion between 2014 and 2023, if they paid Obamacare’s fines and dumped all of their workers onto the subsidized exchanges.

In addition, the survey found that 84 percent of respondents believe that "future health costs will increase at rates that are greater than those they’ve experienced over the past five years." They expect insurance costs to grow at 7.6 percent, on average, over the next five years, compared to 5.9 percent for the previous period.

The data is interesting, and a useful contribution to the health-care debate. But there’s one thing. Conservatives have long believed that a critical aspect of health-care reform is transitioning the insurance market away from employer-sponsored insurance toward an individual market. This, indeed, is what George W. Bush sought to do by equalizing the tax treatment of employer-sponsored and individually-purchased insurance.

Are Republican critics hypocrites?

Liberals are already salivating at the opportunity to call attention to Republicans who lambast Obamacare’s changes to the employer-sponsored insurance market, while supporting their own reforms of that system.

As Noam Levey writes in the Los Angeles Times, Mitt Romney "has embraced a strategy that in crucial ways is more revolutionary—and potentially more disruptive—than the law Obama signed two years ago. The centerpiece of Romney’s plan would overhaul the way most Americans get their health coverage: at work. He would do so by giving Americans a tax break to buy their own health plans. That would give consumers more choices, but also more risk."

Jonathan Cohn follows Levey’s thought to fruition, contrasting Obamacare’s effort to "slowly [reduce] the employer health benefit tax break while simultaneously creating insurance exchanges with subsidies" to a presumably more disruptive Republican plan:

Levey’s article, by the way, makes one other critical and under-appreciated point. Republicans frequently complain that, because of the Affordable Care Act, some people with job-based insurance might lose it, despite President Obama’s promise that people with coverage will be able to keep it. That’s true. But, by transforming the tax treatment of health insurance without accompanying reforms of the insurance market, Romney’s proposal is "potentially more disruptive" and would leave even fewer people with job-based coverage.

In a world that demanded honest argument, Romney and his allies would have to acknowledge that fact. I’m not holding my breath.

Reducing consumer choice (Obamacare) vs. increasing it

There is a big substantive difference between the Obamacare approach and the free-market approach, when it comes to reform of the employer-sponsored system. Obamacare reduces consumer choice, by steering more and more Americans into Medicaid and the highly regulated exchanges, in which beneficiaries would have to choose between a very limited range of costly, government-designed insurance plans.

Free-market reforms, on the other hand, would increase consumer choice, by giving workers control over their own health dollars. Under a free-market system, workers could stay with their employer’s plans, or buy insurance on their own that better suits their needs. For example, young, healthy workers could take dollars out of their company’s expensive plan and steer them towards high-deductible insurance combined with a health savings account.

In addition, President Obama repeatedly promised that "if you like your plan, you can keep it," a promise that his signature health law clearly shatters. It’s fair for Republicans to point that out.

The Ways and Means report properly calls attention to the ways in which Obamacare will drive premiums upward, which is a big driver of employers’ desire to dump health coverage. The ideal Republican solution will drive costs downward, thereby leading to less employer dumping, even if the tax treatment of health insurance is equalized.

Republicans want to be running Congress and the White House in January 2013. It’s important that, as they launch their legitimate critiques against Obamacare, they do so with an eye to governing, and not just campaigning.

Original Source: http://www.forbes.com/sites/aroy/2012/05/01/fortune-100-survey-employers-could-save-422-billion-by-dropping-health-coverage/