A new Avalere study gives Democrats more ammunition againsttheir claims that the McKinsey survey, which reported that a third of employers willsoon be dropping health coverage for employees due to Obamacare, isan “outlier.”

|

The Avalere Health report, called “The Affordable Care Act’sImpact on Employer Sponsored Insurance: A Look at theMicrosimulation Models and Other Analyses,” concluded that largeemployers are unlikely to stop offering coverage in the near-termas the benefit to dropping coverage might not outweigh the costsfor both the employer and their employees.

|

“Overall, our analysis suggests that the ESI market will befairly stable after 2014 when key ACA coverage provisions go intoeffect,” the report says. “The microsimulation models estimatesfrom RAND, the Urban Institute, the Lewin Group and theCongressional Budget Office show net changes to ESI rangingfrom negative 0.3 percent to positive 8.4 percent compared tobaseline projections without ACA implementation – not major changesin the market.”

|

However, the study suggests employers might rethink coverageafter seeing the ACA go into effect.

|

“While it is possible the ACA could create strong incentives forchange, the extent to which it does largely depends on theviability and operating details of the exchanges, and the relativevalue of plans offered in the exchanges,” the report says.

|

The report indicated more changes in ESI rates could occur after10 years as many large employers take a “wait and see” approachwith health reform, making long-term large employer actionsdifficult to predict.

|

“While near-term changes in aggregate ESI rates are unlikely,longer term erosion—over 10 to 20 years— is possible,” the reportstated. That would be made even more probable if the stateinsurance exchanges called for in the law prove to be a bettervalue than employer-sponsored coverage.

|

Also, the report cautioned that low-wage workers, smallbusinesses and those with early retirees in particular are likelyto turn to the exchanges for their coverage.

|

Get more: Coverage of McKinsey'semployer health care survey

|

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.