A new Urban Institute report challenging the notion, and some evidence, that the Affordable Care Act will likely lead to a drop in employer coverage suggests that employer-sponsored health insurance may actually increase under the healthcare law.
The public and private cost containment measures in the ACA "may actually slow the decline of employer-sponsored health insurance occurring since 2000," the Urban Institute report concludes, noting the peak of employer-sponsored insurance in 2000, when 69 percent of Americans were covered through work, compared to less than 60 percent today.
The Urban Institute's hypothesis runs in the opposite direction of other estimates. The Congressional Budget Office expects the law to lead to a small decline, with 3 to 5 million people losing employer-sponsored coverage. Other reports have described businesses as weary of the of the law's morass of requirements. In Deloitte's 2012 survey of 560 employers with 50 workers or more, 9 percent said they'd likely drop coverage in the next decade. A controversial 2011 McKinsey & Company survey of some 1,300 employers found 30 percent would likely drop coverage.
Doing a sort of what-if analysis, the Urban Institute tried to model the ACA's effects as if it had been implemented in full this year, as it will be in 2014.
Had it been implemented this year, the Urban Institute contends the ACA's requirements would have had a negligible impact on total employer-sponsored coverage. It generally wouldn't affect costs per person for large businesses and actually would reduce costs for small businesses, according to the report. Only for mid-size businesses with 101 to 1,000 employees would costs per person be higher, by as much as 10 percent, largely because a lot of employers of that size aren't offering coverage today and enrollment is expected to grow.
[See also: 3 lessons to learn from Massachusetts' healthcare cost containment law]
In total, the report found, employer-sponsored coverage would have increased by 2.7 percent, from 151 million to 155 million people, and employer spending would have increased by 2.2 percent, from $553 billion to $565 billion. Companies with 100 employees or less would have expanded coverage the most, by about 6 percent.
Those companies and small businesses exempt from many of the ACA's penalties would likely see costs per person insured fall by about 7 percent, largely as a result of tax credits offsetting the premium costs, according to the report.