Dean Favors Migration From Employer-Provided Health Care

Former Democratic Vermont Gov. Howard Dean on Wednesday praised the White House's decision to delay by one year the enforcement of a rule that requires larger employees to provide health insurance for their workers. It is a key provision of President Barack Obama's health-care reform law.

"I think this is a good thing," he said on CNBC's "Squawk Box," because he prefers fewer mandates and the delay will help the Obama administration "get their house into order" to implement a very large and complex system.

In addition, Dean said, "What I think will happen, the unintended consequences for everybody ... is more people will migrate out of employer-based health insurance, into the exchanges." That refers to the planned government-run online marketplaces designed to help people buy health insurance from private health care providers.

(Read More: Crucial Rule Is Delayed for Obama's Health-Care Law)

He said migrating to insurance exchanges is good in the long run because "I've always believed that you've got to divorce employment from health insurance in this country for a large number of reasons."

Dean argued that because health care has gotten "so expensive over so long—three times the rate of inflation for nearly 30 consecutive years—employers are either cutting back or reducing benefits or not giving health insurance at all,"

A long-term move away from employer-funded health care would help reduce costs and "get the monkey off the back of the business community."

Large employers will probably continue to offer health insurance "for a while," Dean predicted, because the benefit helps attract and retain employees. Health insurance gives a big employer a "competitive advantage getting the kind of employees they want," he said.

Howard Dean
Getty Images
Howard Dean

Asked by CNBC's Joe Kernen if he'd like the government to handle everyone's health care, Dean said, "That's not going to happen."

(Read More: America's Self-Employed Caught in Obamacare Gaps)

Known as Obamacare, the Patient Protection and Affordable Care Act was signed into law by Obama on March 23, 2010, yet many of its changes to the health-care system won't take effect until 2014.

The move to delay the employer mandate raised questions about the future of other provisions of the law, including the mandate for individuals to obtain coverage in 2014. So far, that mandate remains in place.

—By CNBC's Drew Sandholm. Follow him on Twitter @DrewSandholm

—Reuters contributed to this report

This story has been revised to clarify that Dean favors a long-term migration away from employer-provided health care.