Federal Healthcare Law Seen Aiding Small Employers: Study

By | June 22, 2011

Fewer Americans are getting medical coverage through their jobs than a decade ago but the 2010 U.S. healthcare law should help stabilize employer-sponsored insurance, two studies released Tuesday showed.

The studies, sponsored by the non-partisan Robert Wood Johnson Foundation, will fuel the political debate over the impact on employer-sponsored health insurance under President Barack Obama’s healthcare overhaul after a recent study said 30 percent of employers might drop coverage with the new law.

A report by the State Health Access Data Center at the University of Minnesota showed that about 7.3 million fewer Americans were covered by employer-sponsored health care in 2009 than in 2000. About 69 percent of non-elderly Americans got healthcare coverage through employers in 2000 but by 2009 that dropped to 61 percent.

Low and moderate income workers employed by small firms were most likely to lose coverage, the study said.

A second study by the centrist Urban Institute said tax and other incentives in the new healthcare law signed into law in 2010 should help increase the number of smaller firms offering insurance to their workers. Large companies have been more likely to offer health coverage than smaller firms and that is expected to continue.

“We find little evidence that the Affordable Care Act will negatively affect small firms,” the report said. “Instead, we find evidence of significant benefits for these employers and their workers.”

Most working-age Americans with health insurance get their coverage through their jobs so the impact of the new healthcare law on employers is a major issue.


Chicago consulting firm McKinsey drew angry criticism from Democratic supporters of the new law when it published a report saying that about 30 percent of employers will “definitely” or “probably” stop offering health coverage once the law takes full effect in 2014.

Republican opponents, who are pushing to repeal the overhaul, seized on the report as evidence that the law will discourage employers from offering healthcare to workers.

On Monday, McKinsey issued a clarification saying that its report was a survey of employer attitudes and “was not intended to be a predictive economic analysis” of the impact of the new healthcare law.

White House policy advisor Nancy-Ann DeParle in a blog posted on the Internet Monday evening criticized the methodology used by the McKinsey report.

She said Avalere Health, a healthcare advisory company, issued a report on Monday that said the employer-sponsored health insurance market was likely to be “fairly stable” after 2014 and that large employers are unlikely to stop offering coverage.

University of Minnesota researchers said the experience in Massachusetts, which served as a model for Obama’s healthcare reform, shows that employers are likely to remain major players in offering coverage even after 2014 when state-based insurance exchanges are to be fully operational.

“We certainly have found in Massachusetts under health reform there, that employers have very much remained at the table,” said Sharon Long, a health policy expert at the University of Minnesota.

(Editing by Bill Trott)

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