Not a Prediction

Recently, McKinsey and Company released a survey claiming that a significant number of employers will stop offering insurance to their workers in 2014. The survey left us with more questions than answers. The article from McKinsey was at odds with a series of respected independent analyses and McKinsey previously declined to release critical information about how the survey was conducted.

Today, McKinsey acknowledged that this report is at odds with these independent analyses and said the report was not intended to predict whether or not employers would offer health insurance. Here’s what McKinsey said today:

The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act… We understand how the language in the article could lead the reader to think the research was a prediction, but it is not.  

And the new information makes clear that the survey is flawed and raises new questions: 

• Nearly 50 percent of all survey respondents admitted they were not at all familiar or had only heard about the employer responsibility provisions in the Affordable Care Act – nearly one-fourth were “not at all familiar” with the law.
• 6.7 percent of the respondents couldn’t  even answer the most basic question “What medical plans does your company currently offer employees?”
• 58.3 percent of respondents did not know how much their companies spend per employee on medical and prescription drug benefits, raising questions about the on-line survey results.
• Only around half of the survey’s respondents described themselves as a “primary decision maker” on employee benefits. Around 49 percent said that they have some influence in the decision-making process.
• The survey that “educated respondents” left out or failed to explain crucial pieces of information about the Affordable Care Act and other existing laws. For example, health insurance benefits are not taxed. Employers who drop health insurance coverage and provide other benefits to their workers would lose this preferred tax treatment. This important fact was unexplained and other key points went unmentioned.

And hidden in the results are some points that didn’t make it into the report:

• 44.5 percent of small businesses report that they definitely or are likely to join the small employer purchasing part of Health Insurance Exchanges where they will be able to secure health insurance coverage for their workers.
• When asked about their company’s overall view of U.S. healthcare reform, 77.8 percent reported that they were positive, neutral, were not sure, or that it is too early to tell.

The Affordable Care Act will make health insurance more affordable and make it easier for employers to offer coverage to their workers. In fact, a new study released today from Avalere Health, a respected consulting firm, looked at the validity of the various analyses published on the subject and found that the employer-sponsored health insurance market will be stable after 2014 and that “large employers are unlikely to stop offering coverage …” And as we learn more, it’s become clear that this one flawed study from McKinsey is truly an outlier. 

Nancy-Ann DeParle is the Assistant to the President and Deputy Chief of Staff