UPS has decided to cut health benefits for employee spouses who can get health insurance from their workplaces. The move is the latest by employers to reduce healthcare costs ahead of the Affordable Care Act, known as Obamacare.
Melissa Thomasson knows what it means when a company eliminates spousal health benefits. Her employer, Miami University, cut spouses off a few years ago.
“Luckily, I’m not married,” says Thomasson, a health economist at the university’s Farmer School of Business.
UPS’s decision is part of the new health-care reality. As Obamacare takes shape, she says, employers are re-thinking their health insurance policies.
"This will force some high cost members off of the health insurance plans and help companies rein in costs," she says, adding that some employers may use those savings to eventually give back to their workers. "Hopefully down the line we would see that in an improved ability of employers to offer more generous wage increases."
But some health experts say that UPS’s decision shows how companies are using Obamacare as a punching bag. At the American Institutes for Research, Marilyn Moon says employers who had decided to put health benefits on the chopping block can now say, "‘Wow, here’s a great a way to do it and blame it on the Affordable Care Act.’"
Some employers are also trying a carrot-and-stick approach to shave health costs. Smokers, for instance, would have to pay higher premiums, but they’d be rewarded with discounts if they kick the habit.
Deborah Chollett, a health economist at Mathematica Policy Research, says companies have been tinkering health benefits for years, and people shouldn’t read too much into UPS’s decision. The change affects just a fraction of the shipper’s U.S. workforce.
"We may see other like-minded employers doing the same kind of thing, but with respect to the impact on employees? It’s minimal," she says.
That’s because Obamacare, she adds, will offer workers or their spouses other health care options.
President Obama is on a bus tour today in New York. One goal of the trip is to spread the word about his new plan for lowering the cost of higher education. He wants to tie federal aid to a new ratings system. Instead of basing aid on the number of students enrolled, it would take into account data on graduation rates, tuition costs, student loan debt and even how much money graduates make after they leave school.
But let’s start with this basic question: Has federal aid money made college tuition more expensive? “Virtually all of the research that has been done suggests it has not,” says David A. Longanecker, president of the Western Interstate Commission for Higher Education. One exception: "Particularly at the for-profit institutions,” Longanecker says.
The list price at both private and public universities has risen much faster than median income, according to higher education economist Robert B. Archibald. But “net price, when you factor in financial aid, has not gone up nearly as much, though I think still faster than median income,” he says.
It’s important to point out that 75 percent of students attend public universities and colleges, where financially pressed states have been raising tuition faster than private universities.
“If the federal government really wanted to directly affect the problem of state finance for higher education, the single most effective thing they could do is to get the cost of state Medicaid programs down,” says Jane Wellman, executive director of the Delta Project on Postsecondary Costs.
She says public college tuition is going up because rising health care costs from Medicaid are consuming state dollars that used to go to education. This is an issue that the president’s new plan doesn’t address.