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Democrats Question Validity of McKinsey Health Care Plan Survey

June 17, 2011
Related Topics: Finance/Taxes, Benefit Design and Communication, Future Workplace, Latest News
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Congressional Democrats are questioning the validity of a McKinsey & Co. survey that showed 30 percent of employers may drop their health care plans after 2014, when key provisions of the health care reform law go into effect.

“The findings of this survey are so markedly out of sync with other assessments that it has raised legitimate questions about the product, including how and why it was created,” nine House Democrats, including Reps. Henry Waxman, D-California, ranking member of the Energy and Commerce Committee, and Sander Levin, D-Michigan, ranking member of the House Ways and Means Committee, wrote in a letter sent Thursday to McKinsey Managing Director Dominic Barton.

“Honest public discourse requires a standard level of transparency—one McKinsey simply has not met,” Senate Finance Committee Chairman Max Baucus, D-Montana, said in statement. “The conclusions McKinsey reached differ sharply from results of other reputable, transparent research on the subject,” added Sen. Baucus, who has called on the consultant to release a wide array of survey-related information including a breakout of respondents by size.

A McKinsey spokeswoman in New York declined to comment.

The survey of more than 1,300 employers of varying sizes found that 30 percent “definitely” or “probably” will stop offering coverage after 2014.

That is when health care reform law requirements, such as federal health insurance premium subsidies for lower-income uninsured employees, begin for individuals to purchase coverage from health insurance exchanges that are to be set up then.

“The shift away from employer-provided health insurance will be vastly greater than expected and will make sense for many companies and lower-income workers alike,” said the study, published in the June issue of McKinsey Quarterly.

Employers that drop coverage would pay an annual penalty of $2,000 for each full-time employee, a fraction of the typical cost of group plans. Group plan costs averaged more than $9,500 per employee last year, according to a Mercer L.L.C. survey.

The McKinsey findings vary from other surveys on the issue.

For example, Mercer last year found that 6 percent of employers with at least 500 employees and 20 percent of employers with 10 to 499 employees said it was likely they would drop coverage in 2014.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

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