Most Americans haven't been personally affected by the Obamacare website fiasco. That's because around 149 million of U.S. residents obtain health insurance through their employers. More than 110 million are covered through Medicare or Medicaid.
If you have insurance through your employer, though, Obamacare could still impact you personally -- and perhaps not in a positive way. That's because many organizations are shifting higher health-insurance costs, incurred in part because of the health-reform legislation, onto their employees. Here are three ways Obamacare could hit your pocketbook.
1. Pricier employee premiums
The most direct way employers might pass along higher costs is through employees' premiums. Comcast (NASDAQ:CMCSA) is one company taking this route. CNBC reported that its parent company's open-enrollment guide for employees included premiums at least 10% higher than the prior year.
Of course, higher insurance premiums aren't a new thing. This time, though, Comcast and other employers are specifically attributing the increases to Obamacare. Comcast's open-enrollment guide cited "federally mandated health care changes" as a key reason for pricier premiums.
2. Inflated deductibles
A less obvious way that employers are passing higher costs along to employees is through higher deductible levels. You won't feel the financial impact until you or a family member undergo medical treatment or use prescription drugs. But the economic pinch is nonetheless quite real.
FedEx (NYSE:FDX) is one prominent example of employers hiking deductibles. The shipping-and-logistics company announced in August that it planned to move around 400,000 employees and their family members to high-deductible plans. FedEx spokesman Patrick Fitzgerald explained that Obamacare has added "costs and complexity" on top of already-rising health-care inflation for large employers, causing the need to make changes.
3. Higher family costs
FedEx's main rival, UPS (NYSE:UPS), is one company that decided to boot spouses eligible for insurance through another source off its plans. UPS announced earlier this year that around 15,000 working spouses of its employees would no longer be covered at least in part due to "costs associated with the Affordable Care Act."
Human resources consultant Towers Watson (UNKNOWN:TW.DL) found that one-third of companies participating in a recent national survey planned to raise premiums for dependents of employees. Nearly three-quarters of the medium-sized and large companies responding to the survey said that Obamacare was causing their insurance costs to go up.
Is Obamacare really to blame?
Comcast, FedEx, and UPS, among many other employers, are blaming Obamacare for higher health-insurance costs. Is that fair?
The trend toward higher insurance premiums for employees and dependents, as well as heftier deductibles, have been in place well before the Affordable Care Act was passed. The Kaiser Family Foundation's research found an 80% increase in health-insurance premiums and an 89% jump in employees' contributions toward those premiums between 2003 and 2013.
That being said, it's hard to argue convincingly that Obamacare isn't sustaining and possibly exacerbating those trends. Aetna (NYSE:AET) CEO Mark Bertolini said his company is passing along to its customers more than $1 billion in taxes and fees from Obamacare. Employers partially on the receiving end of those increased costs must either absorb them or pass them along to someone -- customers and/or employees.
Another factor is that Obamacare's individual mandate requiring most Americans to have health insurance will cause significant numbers of employees who previously opted out of their employer-provided coverage to now opt in. An estimated 15% to 20% of workers didn't enroll in their employers' health plans. That will change with Obamacare, driving employers' costs up -- and providing financial incentives to pass the higher costs to employees.
Then there are other provisions in the Affordable Care Act that contribute to higher employer-sponsored health-insurance costs. The coming 40% tax on so-called "Cadillac plans" is causing employers to make changes that raise employee's total costs. Requiring plans to cover children through age 26 on their parents' plans is another reason why premiums have gone up.
Passing the buck
With all of this literal passing of the buck, are there any clear winners from an investing standpoint? One group appears to be a prime beneficiary -- private health exchanges.
All of the headaches for employers associated with health reform seems likely to push demand for private health exchanges higher. These exchanges allow employers to give their employees defined amounts to buy insurance on their own that best meets their needs. The employers can largely remove themselves from the process.
Towers Watson is one of several operators of private health exchanges that could win over the long run. The company's OneExchange includes several major insurance companies offering options for its employer customers. Towers Watson also bought Extend Health earlier this year. Extend Health operates the nation's largest private Medicare exchange.
If you're employed, get ready for your employer to shift more costs to you -- if not now, then in the future. The likelihood is that Obamacare will impact you, regardless of what happens or doesn't happen with the website.