A McKinsey survey, released in June 2011, reported that 30% of employers whose companies offered employer-sponsored health insurance said they would “definitely” or “probably” drop coverage in the years following 2014, the year the Affordable Care Act (ACA) takes full effect. (9 percent said “definitely,” and 21 percent said “probably.”) The respondents in the survey worked for companies that ranged in size from under 20 employees to more than 10,000 employees. They represent a cross section of employer size segments, industries and geographies. All of the respondents played roles in choosing which benefits their companies provide to employees either as primary decision makers (51%) or having influence in the decision-making process.
Respondents were asked their level of awareness of nine key provisions of the ACA such as the individual mandate and employer penalties, premium subsidies and guaranteed issue. Next, the survey explored what respondents said they would do in 2014 and beyond. To make answers to those questions more informed, respondents received factual information on the major provisions of the ACA (e.g., exchange based subsidy levels by household income, guarantee issue provisions, medical underwriting and rating restrictions, and employer penalty or play-or-pay tax levels).
Respondents were then asked a set of questions on whether they thought they would maintain current coverage, offer alternative models such as defined contribution, offer mechanisms to provide employees the choice of accessing the Exchange or cease providing coverage. Respondents were also asked about their biggest concerns in ceasing coverage as well as how they would compensate employees if they did cease to provide coverage.
We were were struck by the intensity of the the negative response generated by the publishing of the McKinsey survey. In addition to the CBO, various insurance industry groups quickly came up with studies of their own predictive of a more gentle downturn in employer-sponsored coverage.
The McKinsey organization responded, “We stand by the integrity and methodology of the survey. The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act. Rather, it captured the attitudes of employers and provided an understanding of the factors that could influence decision making related to employee health benefits.”