Think of the changes that will take affect by 2014, a health insurance exchange in every state, and broader terms of Medicaid coverage for families who make $30,000 or less and for individuals who make $15,000 or less. Will that mean that individuals who utilize the online insurance exchanges will find a better plan than their employer offers? Will this trend then disincentive employers to offer coverage because it will save them money from paying a group premium?
Well the simple answer is: No
Why is that? Well according to a brief released by researchers at the Urban Institute funded by the Robert Wood Johnson Foundation, reasearchers found conclusions that challenge the claims that the ACA will eliminate employer-sponsored health insurance.
How were these conclusions made?
After analyzing some of the ACA’s provisions, which include tax subsidies and identifying how employers would want to attract and retain a skilled workforce vs. cost-saving, the researches used what they call a micromodel to run the scenarios.
- The key to the ACA’s impact on employer sponsored insurance will be whether most workers prefer employer-sponsored health insurance to coverage newly available through state insurance exchanges.
- Their model “shows that ESI will likely remain most workers’ preferred and therefore primary source of coverage, even as the ACA is implemented”
The rationale of Employer Sponsored Health Insurance in the future
- Employers will drop coverage if a majority of their workers can find equal or better coverage at a more affordable premium and want to switch. But if the employees are better paid, the authors of the brief conclude they will remain better off with employer sponsored health insurance.
- There are many barriers in deciding what the preferences of the employees are in dropping health care coverage, including costs and recording the data, which makes it unlikely employers will drop their coverage.
- There are many conflicts to having an optional employer sponsored health insurance for those who wish to purchase insurance from the exchange, so it is unlikely employers will offer this option.
- Less popularly mentioned is the employer mandate from the ACA, preventing many employers from dropping coverage in favor of the health insurance exchange.
The study offers great insight as to how the Affordable Care Act will affect the health insurance marketplace in the future.
In theory, if employers find that they can save on their premiums by having their employees purchase insurance from the exchange instead of offering their insurance, it is a benefit. On the other hand, if the employer is looking to attract workers by offering more premiere and extensive coverage, they will continue to offer employer-sponsored health insurance.
The overall goal is to improve the experience on the consumers of health insurance, and expand their options - and not to dissimate the system of employers sponsoring health plans.
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