Healthcare Matters

According to a new study released by Deloitte, about 10% of the employers it recently polled plan to drop health coverage for workers by 2014 –around the same time most of the new health care law goes into effect. The same study hints that the reported percentage may actually go higher, but not nearly to the 30% level estimated in a previous study published by McKinsey & Company.

Here are the specifics: 9% of companies in the Deloitte study said they expected to stop offering insurance within the next three years; 81% were “planning” to continue providing benefits, and 10% “weren’t sure.” Now digest this: About one third of those surveyed by Deloitte said they would stop providing coverage if the new law requires them to provide more generous benefits (which it does for a huge percentage of covered workers); that they would drop coverage if the new law places a tax on high-cost plans (which it is scheduled to do by 2018); and that they would drop coverage if the cost of penalties for not providing coverage is less expensive than paying the benefits (which has always been the case).

You don’t have to be a mind reader to recognize that most employers are highly reluctant to reveal their true intentions –that’s just common sense. But if you’re scratching your head because you may have just noticed that the Deloitte and McKinsey studies actually tell the same story, but that Deloitte’s reported conclusions appear to be “politically tempered,” then you’re not alone.

Critics of reform are saying “I told you so” and pointing out that companies simply can’t chin the added expense. It won’t matter who promised that you could keep your preferred carrier because most Americans get their coverage through their employers and most employers are going to end up changing their coverage models anyway, regardless of what they say.

The under-reported “speculation” is that none of this is really going to matter at the end of the day. The switch employers will make/are making from a defined benefit to a defined contribution is inevitable. Whether the development of exchanges occurs as directed under the Affordable Care Act or the private sector grabs the ball and runs with it, this is where the next generation of coverage will be adjudicated.

And it should be an improvement. Let’s face it, the bar aint too high.

—Tom Finn