GAO Finds Mixed Effects of PPACA on Employer Coverage

August 13, 2012 ( - Microsimulation models to estimate the effects of the Patient Protection and Affordable Care Act (PPACA) on employer-sponsored coverage generally predicted little change in prevalence in the near term.

By Rebecca Moore | August 13, 2012
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However, results of employer surveys varied more widely, according to a Government Accountability Office (GAO) review.  

The five microsimulation study estimates ranged from a net decrease of 2.5% to a net increase of 2.7% in the total number of individuals with employer-sponsored coverage within the first two years of implementation of key PPACA provisions, affecting up to about four million individuals. Two of these studies also indicated that the majority of individuals losing employer-sponsored coverage would transition to other sources of coverage.   

In contrast to the microsimulation studies, which estimate the net effect on individuals, most employer surveys measure the percentage of employers that may drop coverage in response to PPACA. Among the 19 surveys, 16 reported estimates of employers dropping coverage for all employee types. Among these 16, 11 indicated that 10% or fewer employers were likely to drop coverage in the near term, but estimates ranged from 2% to 20%.   

Most surveys were of employers currently offering coverage and therefore did not also address whether other employers may begin to offer coverage in response to PPACA; however, three that did found that between 1% and 28% would begin offering coverage as a result of PPACA.