Will Affordable Care Act Lead To More Or Less People With Employer-Sponsored Insurance? (Hint: No One Knows)

With the clock ticking down to 2014, when many of the controversial portions of the Affordable Care Act start kicking in, the folks at the Government Accountability Office thought they would look into whether or not certain provisions in the law would cause some employers to stop offering health insurance to employees, or cause them to add benefits, or lead consumers to look for cheaper options elsewhere. After sifting through available studies, the GAO came to a conclusion that we’ll probably just have to wait and see.

Starting in 2014, most businesses with at least 50 full-time equivalent employees must offer health insurance that meets a minimum standard or face financial penalties. Some believe this will increase the number of employers who offer coverage to employees and increase the overall number of people with employee-sponsored insurance. Meanwhile, others believe that the availability of more affordable insurance through new “exchange” marketplaces will lead to a drop in the number of people with employer-sponsored coverage, and that some smaller businesses will drop coverage altogether.

In an attempt to sort through the available data, the GAO looked at more than two dozen different studies and surveys on the topic — and found virtually no consistency in the results.

The most consistent results came from the five studies that used statistics-based microsimulations to predict changes within the first two years of the ACA kicking in.

Two of the studies predicted modest increases (2.7%, or approx. 4 million people) in the number of Americans being covered by their employers, while two others showed modest decreases (-2.5% and -1.6% — 4 million and 2.4 million people, respectively), with the fifth study predicting almost no change (.1%, or 200,000 people).

The GAO also looked at 19 surveys of employers regarding the ACA and found, well… that surveys may not be a reliable prediction tool.

While 16 of the 19 surveys concluded that employers would drop coverage, the estimates on just how many would drop coverage in the near term varied wildly, from 2-20%.

Part of the issue with these surveys is that most of them only talked to businesses that currently offer employer-sponsored coverage and asked if the companies plan to drop it. Very few surveys asked businesses if they planned to add coverage because of the ACA.

Of the three surveys that that did ask that question… well, once again the numbers are inconclusive, with anywhere from 1-28% saying they would begin offering coverage because of the new laws.

Another topic on which the surveys sort of agreed is that employees who take employer-sponsored insurance will likely be paying a larger portion of their premium than they already do. But again, it’s impossible to predict just how widespread this will be with surveys predicting anywhere from 16% to 73% of employers will begin requiring higher employee contributions for health care plans.

“[T]he validity of [the survey] results may be limited by the knowledge of survey respondents,” writes the GAO. “Experts have noted that employer surveys tend to be answered by human resource officials with varying levels of knowledge about PPACA. In addition, researchers note that survey responses do not require careful analysis or extensive deliberation and have no consequences for the responders.”


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  1. wombats lives in [redacted] says:

    /me prepares some popcorn and will follow the comments.

  2. Harry Greek says:

    It depends on who you ask.

    Liberals: YES!

    Conservatives: Impeach Obama – he is a communist terrorist who was born in Kenya. His birth Certificate is clearly fake.

  3. Loias supports harsher punishments against corporations says:

    Sounds like a win-win. Either more people will be covered by employer-sponsored plans, or more people will be covered by exchanges.

    • dush says:

      Or employers won’t hire a 50th employee or any more so they can stay under the threshold for the fee.

      • Raanne says:

        If they were thinking like that, then they probably already are trying to stay under 50 because that is the cut off for a lot of laws (FMLA, COBRA, etc) for businesses.

        • dush says:

          Some small businesses are letting people go or cutting back hours so they don’t have 50 full time employees anymore.

  4. Lyn Torden says:

    IMHO, health care needs to NOT have anything to do with employment. Where’d that idea come from, anyway?

    • TuxthePenguin says:

      Ironically enough, the government thanks to wage controls. So businesses couldn’t pay more… so they added this “benefit”. And its just never gone away.

    • Loias supports harsher punishments against corporations says:

      It was born out of a time in U.S. history where there was a lacking in available workforce. Business used whatever means necessary to entice employees from changing employers, including offering vacation, pensions, and free or near-free healthcare, among other perks.

      • NeverLetMeDown2 says:

        It wasn’t just a shortage of labor, it was a shortage of labor _and_ wage controls, as Tux noted. It was the wage controls that pushed companies to find other, non-wage, ways to increase compensation.

        • amylynn1022 says:

          The wage controls were due to this little even called _World War II_ when the government had to limit wages or they would have soared out of control due to worker shortages. Companies has to resort to “benefits” to recruit employees, because those weren’t as heavily restricted. I long for the days when “benefits” means “perks your employer uses for recruitment and retention” rather than “health insurance”.

          Companies have been either dropping insurance or pushing more and more of the costs on employees for ages now. And you don’t really get to pick your insurer or plan. I would have preferred a “Medicare for All” approach but if the end result is that we get employers out of the business of providing access to healthcare for their employees that will be a plus. I am just fearful of the chaos on the way and even more fearful of the people in power who are scared of losing theirs and in denial about the shameful state of our current system.

  5. incident-man stole my avatar says:

    all I know while one benefit has improved, physicals once a year instead of every 3 for adults many more have declined.. increased co-pays plus 10% for lots of things like surgery, hospitalization, anesthesia.. this is not going to end well

  6. AngryK9 says:

    It is going to lead to insurance companies and/or employers to doing what ever increases their bottom line, regardless of any possible consequences or benefits to those covered under the plans.

    • Jevia says:

      And that’s different from what’s been happening the last 10 years how? Before ACA, my health care premiums went up, my coverage went down, every year.

  7. HomerSimpson says:

    “Damn proles have no right to healthcare! They should be happy they’re actually being PAID to work!” /republican

  8. dolemite says:

    My place of employment has health insurance. I believe my employer pays the least amount possible, because it costs a single person close to $200 a month, a single+spouse close to $400 a moth, and a family is around $1000 a month (this is all with $3,000 yearly deductibles). Personally, I get my insurance directly from Anthem for 1/2 the cost of what it is through work, with only a $500 deductible. I agree with others though…we need to de-link insurance from employer and work on making it affordable for everyone (or single payer).

  9. kathygnome says:

    We don’t have to guess. I come from that magical future universe (Massachusetts) where this plan has already been implemented for several years. Coverage under employer provided plans has increased under health insurance reform.

    Next question?

    • Kuri says:

      Eh, all certain politicians seem ot be asking instead is “Well, a Democrat did this, so how soon can we repeal it, then say we’ll do it, but never do it?”

    • ARP3 says:

      I’m sorry that place has been retroactively removed from existence as activities there are not consistent with the current Republican nominee’s views.

  10. SeattleSeven says:

    What kind of communist governor allowed that to happen!? That man should be found and given to the tea party so they can dispense justice!

  11. bben says:

    If I were an employer sitting right on that bubble (49 employees) I would think twice – or even three times before hiring the one that will put me over that line. Adding just one employee could easily end up costing far more than the one extra employee brings in leading to not hiring them. There is a lot more expense in running an employee health plan than just the insurance itself – the cost of administering the plan isn’t going to be cheap either.

    • JJFIII says:

      50 is the magic number,. but if you have 49 employees with no health insurance, you will have UNBELIEVABLY high turnover. Turnover costs a business FAR more in lower productivity, lower job satisfaction, training etc.
      Any business person who made the decision to not hire somebody based on that issue is not long for the business world. The GOOD business will think, well I am going to hit 50, but I can forecast adding 20-50 more in the next 3-10 years, so start NOW. If your thought is your business will never grow, then I can promise you it will not, and competitors will eat you alive.

    • amylynn1022 says:

      “There is a lot more expense in running an employee health plan than just the insurance itself – the cost of administering the plan isn’t going to be cheap either.”

      Which is why I have been mystified that the business community hasn’t been more vocal in support of getting this burden off their backs. Do they enjoy spending time and resources that they could be using to further their business administering their employee’s access to the healthcare system? Not to mention that it puts them at a competitive disadvantage if they compete internationally. And yet the Chamber of Commerce has been one of the most vocal opponents of healthcare reform.

      • ARP3 says:

        It’s because they know the only way it could get paid for is via personal and business income taxes. They are opposed to increased taxes, even if it means that they’d make more money in the end due to reduced health care burdens. Taxes are bad without exception.

  12. Donathius says:

    It really depends I think. My employer doesn’t pay the most, but they’re about average with other private universities. The big benefit for non-faculty employees, though, is the health insurance. That being said, my cost for my insurance is about to double due to Obamacare provisions.

    Incidentally my father-in-law works for [a large national telco] and they were told that it would actually be CHEAPER for them to drop health insurance for their 40,000 employees and just pay the fine. They’re not going to drop the insurance because that would be douchey (and the bean counters want health insurance too!), but it just goes to show how poorly thought out the final bill actually was.

  13. luxosaucer13 says:

    IMHO, if President Obama pushed harder for the inclusion of the public option or even medicare for all, this whole issue would be rendered moot. He had one chance (the first 2 years of his term) to make this happen and squandered a golden opportunity to actually REFORM healthcare in this country, instead of this massive insurance industry giveaway called the Patient Protection and Affordable Care Act.

    Instead, Obama was too concerned about “getting along” with those who opposed him, and the sad part is that those who oppose his agenda would hate him even if NO healthcare bill (or anything else he wanted to do) ever came to fruition, simply because of his party affiliation. He was elected based upon his “promises” to the electorate and failed to live up to them. Sadly he wasn’t the first to fall victim to this and won’t be the last.

    Regarding the next Presidential election, once again, I’m forced to vote third-party or write-in, because the major parties keep giving us effectively a choice between horse sh*t and cow sh*t. It’s all sh*t, just one looks and sounds different than the other. Until the electorate gets a clue and rises above partisan bickering, it will never change.

    We get the best government money can buy and people are duped enough to vote for.

  14. Press1forDialTone says:

    If a company can somehow get away with NOT providing
    healthcare coverage and tell an employee to just use
    the healthcare exchanges, they WILL. Full stop.

    But, the new law makes it clear to the insurance world
    (who often make it very burdensome for any sized company
    to offer the coverage they would like to attract the best employees)
    that you WILL cover everyone and the coverage WILL be able to
    be afforded.

    The new healthcare reforms don’t target businesses as the
    abusers, it targets the healthcare insurance providers and
    rightly so. They have abused their position and so are the
    credit card companies and the list goes on and on.

    The private sector is ultimately not the place to look for
    the answer to our healthcare dilemma. They should be
    removed from the equation, but trillions of dollars are involved
    and we won’t get to full-coverage, single-payer coverage
    in one step. The private sector insurance industry is getting
    one last chance to provide affordable care for ALL or else.

    The “or else” is: Your industry ceases being a middle man and
    goes buh-bye.

  15. Carlos Spicy Weiner says:

    I know it’s not going to happen in the corporate-agarchy we call a government, but ALL health insurance companies profits should be regulated, and in a way that doesn’t just give them a wink-wink-nod-nod loophole. The Healthcare Industry is for profit, and we wouldn’t have the innovation and research if it weren’t (a reason a lot of Big Pharma companies say there is not much research into new antibiotics is they can’t make enough). But Health Insurance should be a revenue-neutral industry to help people get the care they need, not bankrupt them. I know, when pigs fly.

  16. palace_gypsy says:

    Correct me if I’m wrong, and I am sure many will, didn’t the good citizens of Massachusetts have an opportunity to vote on their healthcare coverage?
    I don’t recall seeing it on a National ballot.

  17. lancedriftwood says:

    What is really worrisome to me is the fact that the big insurance companies have always been in favor of Obamacare. Somehow I don’t think this bode well for the consumer in the long run.