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TheStreet Open House

Red Staters Ready to Throw Workers to Health Care Exchanges They Oppose

NEW YORK ( TheStreet) -- While there is plenty of room for debate about the merits and drawbacks of the Affordable Care Act, known more colloquially as Obamacare, consumers should know that how the act affects them may depend on where they live.

Specifically, in a so-called "red" versus "blue" state.

Data from New York City-based GfK/Research says one of the largest factors will be how businesses manage employee health care under the new rules.

Evidently, firms in more conservative (red) states, according to GfK, are more likely than liberal (blue) states to "change benefit plans" if and when Obamacare is fully implemented, "away from the traditional model of employer-sponsored health benefits and toward the use of health insurance exchanges."

GfK looked at health care plans and strategies at 504 U.S. companies spread evenly among red and blue states (and swing states as well) and found a "clear difference" on how employers in conservative and liberal-leaning states view health care reform.

The firm says benefits managers in red states are more likely to view health care reform as bad for the corporate bottom line, with 59% of managers at red state companies saying health care costs will rise more than if no reform had been passed. That's not all that higher than company managers in swing states, where 58% hold the same view.

In blue states, only 46% of benefits managers say heath care costs will cost more under Obamacare than if health care reform had failed to pass into law.

For consumers in red states, that could mean a faster path to health care exchanges as conservative-leaning companies bow out of providing heath care plans and accept fees and tax penalties from the government for doing so. GfK says companies that stop providing health care insurance believe they spend less money on those taxes and penalties than they would in embracing health care reform.

It's actually been red state consumers, individually and institutionally, that have railed against government-run heath care exchanges. But if companies in those state states "opt out" and pay those penalties, that's likely where employees of those firms will wind up.

For consumers, landing in a government-run health care exchange is an open-ended proposition. They may or may not keep their same provider, and they may or may not see out-of-pocket health care costs rise -- not an optimal scenario in any kitchen-table family budget discussion.

"These results have huge implications for the strategies that health insurance companies will use in pursuing business in different regions of the country," says Tim Nanneman, director of health insurance research at GfK. "Ironically, the movement away from the traditional model of employer-sponsored health benefits and toward the use of health insurance exchanges may happen most quickly in the areas of the country that are most opposed to health care reform."

GfK offers a few other conclusions from its research:

  • 37% of red state benefits executives say that by 2015 their firm will switch to a defined-contribution health care model in which workers take more control over paying for their own benefits. Only 22% of blue state health care managers, and 24% of swing-state managers, hold the same view.
  • 56% of red state managers are skeptical about their employees complying with the law, versus 37% at blue state firms and 49% of swing-state firms.
  • 61% of red state managers view their response to Obamacare as negative, compared with 32% at blue state firms and 54% of swing-state companies.

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