This could hardly have been the intent when healthcare reform was passed last year, but a recent study by top-notch consulting firm McKinsey suggests that as many as 30% of employers plan to drop health insurance as a benefit when the new healthcare law goes into effect.
As Reuters reports today, nearly 1/3rd of U.S. employers suggested that they are “definitely” or “probably” going to stop offering health insurance in 2014. This is consistent with the CBO’s analysis that 7% of Americans covered by employer-based insurance will have to move to subsidized-exchange insurance in just a few years.
It cannot be coincidence that this 30% figure is the exact same figure that McKinsey discovered would be the percentage of employers likely to gain economically from dropping insurance coverage as a benefit. Moreover, current research suggests that even if employers stop providing health insurance, few if any employees would seek employment elsewhere. Why? The high rate of unemployment and the sense that one is fortunate to have employment is one hypothesis. Another is that because affordable healthcare options would be available via state-based exchanges, there would be no need to change jobs to get access to health benefits as so many American’s do now.
Still, this potentially dramatic shift away from employer-based health insurance is likely to have resonance throughout the business world and for employers and employees alike. Will companies be able to offer better benefits of other kinds to their staff, such as professional development funding, or will the saved earnings go to boost CEO salaries and shareholders? One would hope it would be the former, but all too often something more like the latter occurs.
Moreover, as we move away from employer-based health insurance in the U.S., our notions of who is “deserving” of health care insurance and what kind of coverage is required is certain to change. Perhaps employees will flock to those companies that still offer “Cadillac” insurance plans and apply less frequently to those who don’t offer the benefit or benefits lesser than other companies. Perhaps all companies will see that if they do not offer benefits we will de facto be in a universal, government sponsored health care system–and that maybe that wouldn’t be a bad thing after all.
Summer Johnson McGee, PhD