White House disputes McKinsey study on healthcare reform
 | |
| Image source: www.whitehouse.gov |
The authors of the report, titled “Healthcare Reform Impact on Employers," surveyed 1,300 employers across industries and geographies. Shubham Singhal, Jeris Stueland, PhD, and Drew Ungerman, MBA, of McKinsey reported that “30 percent of employers will definitely or probably stop offering ESI in the years after 2014," although the Congressional Budget Office has estimated that only about 7 percent of employees currently covered by ESI will have to switch to subsidized-exchange policies in 2014.
“Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI,” the report continued. “At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.”
Nonetheless, more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI—although about 60 percent would expect increased compensation, the authors stated, adding “[o]ur survey shows significantly more interest in alternatives to ESI than other sources do, for several reasons. Interest in these alternatives rises with increasing awareness of reform, and our survey educated respondents about its implications for their companies and employees before they were asked about post-2014 strategies.”
The report did not release a complete methodology to its research. McKinsey Quarterly is published by McKinsey, a management consulting firm based in New York City.
Nancy-Ann DeParle, assistant to the President and deputy chief of staff, took issue the report in a June 8 White House blog post. “McKinsey says they obtained their data after they ‘educated respondents’ about reform and that their survey used proprietary research. We don’t know what respondents were told or whether they had the chance to check with their colleagues or crunch the numbers for their business before responding,” she wrote.
DeParle branded the report as an outlier, citing data from Rand, the Urban Institute and Mercer in support of PPACA’s affect on ESI. For example, Rand stated that the percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges, she said.
“Unfortunately, the study misses some key points and doesn’t provide the complete picture about how the PPACA will strengthen the healthcare system and make it easier for employers to offer high quality coverage to their employees.”
Economists agree that employers offer health insurance to help attract and retain the most talented employees, DeParle further argued. Therefore, employers will continue to seek out top talent and the new law makes it easier for them to do so by tackling health costs and supporting small businesses. "Additionally, dropping coverage is unlikely to save money for employers,” she said.
While the results of reform have yet to play out, DeParle concluded that “we agree with experts who project that employers will continue to offer high quality benefits to their workers under the new law. This one discordant study should be taken with a grain of salt.”