EBRI Workshop on Employment-based Health Benefits

The Employee Benefit Research Institute provides much interesting research.  It recently held a policy forum to look at work-related health benefits.  An Issue Brief reports on the forum, summarizing the talks of the participants, who represented benefit consultants, actuaries, think tanks, pollsters, large business, small business and payers.  (EBRI Paper) A few samples of the discussion follow.

It was noted that the rising price of health insurance has priced many low-paid workers out of the market even when their employer offers insurance.   Increased cost-sharing may also cause employees to drop coverage.  Even if they keep it, they probably seek less health care, which may lower short-run costs but may have poorer long-run consequences.  Large firms tend to almost all continue to offer coverage and also tend to have lower costs and cost growth, because of leverage and ability to invest in health improvement and management programs.  Large employers see health management as a more important cost control strategy than cost-shifting.  Large employers believe that evidence indicates that these programs work.

The public believes health quality is generally good, cost is a big problem.  Only 14%, however, believe that the system needs a complete overhaul; about 51% think it needs major changes.  On an issue that has seesawed back and forth over the last few years, the public currently is unwilling to pay higher health insurance premiums or taxes to provide health insurance to more Americans, by a 54% to 42% margin.

Consultants indicated that if the current reform bills passed, many employers would see enormous cost-savings if they paid the $750 a worker penalty instead of providing coverage.  While reluctant to do so, many employers would face strong internal pressure to drop health benefits.  Others suggested that particularly large employers would be slow to drop health benefits, because workers value them and the plans play a significant role in maintaining employee productivity.  As many as 87% of employers, however, would reduce benefits if health reform increases costs, which is what they expect will happen.  Thirty-eight percent would increase prices to customers and 30% would reduce employment or salaries, just what we need to help economic recovery.  The actuary expressed the belief that wellness, disease management and value-based insurance did nothing to control costs.

Consumers and unions just want more benefits at a lower cost, and their representatives appear to be the most ostrich-like of the constituents, completely ignoring the dire state that most perceive employee health benefits to be in.  Small business is most concerned about current costs and the impact of reform and most would just as soon be rid of the employment-based health coverage system.   All-in-all, an interesting collection of viewpoints.