Employers Worried about Health Reform Cost Impact

December 6, 2011 (PLANSPONSOR.com) - A survey found employers worry healthcare reform will either fail to slow the increase in healthcare costs or make cost trends worse. 


Only 11% of surveyed benefit decision-makers believe costs of health benefits will increase more slowly than if no reform had passed, while 51% think costs will increase more rapidly. Many remain uncertain about the impact of healthcare reform, with 38% not sure about the effect of health reform on future costs.    

Even in an environment of uncertainty about the future of healthcare reform, a majority of employers surveyed (56%) say they are likely to continue to offer employer-sponsored health insurance after healthcare reform is enacted. Only 12% of benefits decision-makers say they would be very or somewhat likely to drop coverage, and another 32% of the 502 private-sector companies surveyed are unsure what they will do.   

Projections vary by the size of employer, with only 4% of decision-makers surveyed from those companies with 500 or more employees considering terminating coverage completely. In addition, decision-makers who say they are familiar with healthcare reform are less likely to foresee their dropping coverage (7%, versus 15% among those not familiar).  

The survey found 87% of company healthcare decision-makers say the effect on the company’s bottom-line will be an important consideration when deciding what to do about employee benefits after healthcare reform, and 82% say the effect on employee morale will be important.   

 Support for healthcare reform is lacking from those surveyed who have experienced the greatest recent cost increases. Those who have experienced the highest recent price increases are also the least likely to see healthcare reform as potentially improving the situation. Thirty percent say they have seen costs increase by 9% or more annually over the last three years, and these companies have the most negative attitudes toward healthcare reform.  

As employers have seen spikes in the cost of offering healthcare benefits, many report they have reacted by increasing premium costs, co-pays and deductibles for employees and dependents. With healthcare costs continuing to increase in recent years, 20% of employers say they have even seriously considered cessation of healthcare benefits.
The survey was conducted by GfK among a sample of 502 private-sector companies currently offering health benefits. Interviews were conducted with those who make or share in decisions about the health and medical benefits to offer company employees. The data was collected online from August 15-31, 2011 with a sample of benefits decision-makers identified by GfK and Research Now.