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More Employers Than Expected May Drop Coverage In 2014


  05:18:03 pm, by MedBen5   , 221 words,  
Categories: News, Health Plan Management

More Employers Than Expected May Drop Coverage In 2014

Anywhere from one-third to one-half of employers may drop group insurance coverage when state exchanges become available in 2014, according to a McKinsey & Company survey. A Wall Street Journal op-ed says that translates to upwards of 78 million Americans who will need to seek out another source of coverage.

McKinsey surveyed 1,300 employers across industries, geographies and employer sizes. While only 30% of employers overall said they would definitely or probably drop coverage altogether, the proportion jumps to over 50% among employers with a high awareness of the Affordable Care Act. This far exceeds Congressional Budget Office estimates (made prior to passage of health care reform) that only 7% of employees would switch to government-subsidized insurance.

A MedPage Today story on the McKinsey survey notes that employers who still provide insurance may require employees to contribute more to their coverage or limit coverage to certain employees. The survey also found that more than 85% of employees say they will remain at their jobs even if their company stopped offering insurance, though they would expect a raise in pay as compensation.

Employers were apparently not put off by the prospect of paying a $2,000 per employee penalty, less than the cost of covering an employee. However, it is highly unlikely that the penalty would remain that low if more employees were forced to get coverage from the insurance exchanges.

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