The proponents of the health reform law claimed to be interested in preserving a thriving private, employment-based insurance market, but the structure of the law almost guarantees that this won’t happen. We have already seen greater increases in health care premiums, as opposed to the reductions advocates said would occur when the law was passed. As the law becomes fully implemented in 2014, what will employers do and what will the effects be on employees? A survey conducted by Willis recorded the perspective of over 2300 employees, ranging from very large to medium sized, on how they will cope with the coming changes in the health plan market. (Willis Report) Big picture findings include that about half of the employers don’t have an overall strategy for dealing with the coming changes, but are just reacting as the changes are implemented; most employers’ primary motivator is keeping costs under control; most employers believe that reform so far has raised their costs at least 2%; most employers have not been able to retain grandfathered status for their plans, largely due to changes needed because of the cost increases; and although they don’t understand how exchanges will actually work, most employers expect to use them for their employees.
Perhaps the most interesting section of the survey is employers’ beliefs about what other companies will do in reaction to the law. Since the vast majority of employers expect health care coverage will cost more in response to the law, they believe that other similar employers will take a number of actions to limit the effect of the cost increases on their bottom line. These include raising employee contributions to premiums, raising copayments and deductibles, increasing payments by employees for dependent coverage and increasing wellness plans. Most employers expect that other employers will transition to a health plan that provides the lowest level of coverage for employees that avoids the play or pay penalties. And many employers expect that they and other employers may eventually encourage employees to get their coverage in the exchanges, and will subsidize that action, rather than offer a health plan. Based on these survey responses, it is clear that the effects of the reform law will not be good for employees and their dependents, who will very likely see reduced benefits at a higher cost.