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Sen. Barrasso – You are Dead Wrong on Declines in Employer Sponsored Insurance

July 22, 2011

Senator, with all due respect your staff did you a real disservice by not doing their homework before you published Watch for dramatic declines in employer-provided health insurance based on old, discredited news and McKinsey’s own walkback of it.

The McKinsey study that “points to a radical restructuring of employer-sponsored health benefits” that started this thread made the bold prediction that 30% or more of employers would drop their ESI and that from 50 to 100 Million people would be dumped into the exchanges.

When challenged on their findings McKinsey, after 2 weeks and a letter from the Senate Finance Committee released their 29 pages of questions and methodologies and included this statement:

  • The survey …”was not intended as a predictive economic analysis of the impact of the Affordable Care Act.” . . . [T]he survey was more of a point-in-time reading of employer opinion. “As noted, the survey only captured current attitudes,”

Other Research

The survey’s headline grabbing results are a huge divergence from every other study done by CBO, SHADACRobert Wood Johnson FoundationAvalereBooz AllenThe Urban InstituteMercer , Rand and others that showed just the opposite.

Three recent surveys done by benefits professionals who are in the trenches with clients in the mid-market everyday are also starkly at odds with the McKinsey study.

  • McGraw Wentworth, the largest independent benefits broker in MI and 8th largest independent in the nation, (500+ employers surveyed)
  • Corporate Synergies (156 financial execs interviewed) , a large NJ/Philadelphia broker, the third largest independent benefits consulting firm in the nation
  • United Benefit Advisors (12,000+ employers surveyed), an affiliate group of 140 mid market benefits brokers and the 5th largest benefit advisory group in the US.

They all reported little inclination by employers to drop coverage due to the law. This is also in keeping with the International Foundation of Employee Benefit Plans (IFEBP) found with <1% of employers planning to drop coverage.

Finally remember that in MA 5 years after Romneycare was enacted 76% of employers now offer coverage vs. 70% before and that is with no subsidies, small business tax credits and lower fines than PPACA has.

Clearly time will tell what really will occur but in trying to read the tea leaves work done by folks who work daily with the employers who will make these decisions trumps any academic work by any consulting firm of any type and should be used as the basis of any analysis not simply a study that discredits a law that you and your Republican colleagues don’t like.

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