An often-heard concern about the Affordable Care Act is that is will cause people to lose the employer coverage they already have. A recent poll found widespread concern among Americans that their employer will drop coverage because of the law and force them to purchase it on an exchange.
Early analyses added fuel to these fears. The nonpartisan Congressional Budget Office estimated in 2012 that between three and five million fewer people would obtain coverage through their employer each year between 2019 and 2022. The consulting firm McKinsey and Company predicted in 2011 that 30% of employers would drop coverage.
But if history is a guide, that concern is overblown. In fact, the ACA may have the opposite effect. It may cause the rolls of employer coverage to grow, not shrink.
A recent blog post for the New York Times explains why. The individual mandate, which requires all Americans to maintain health coverage or pay a penalty, may induce many who had previously turned down their employer’s coverage to change course. Many of them may decide not only to sign-up for coverage they had rejected but also to demand that their company keep offering it.
That was the experience in Massachusetts when it implemented a similar system in 2006 under Governor Mitt Romney. The number of companies offering coverage and the number of workers accepting it both increased.
There are early indications that the ACA may be having a similar effect. Several recent surveys indicate that more employees are signing up for the coverage offered through their workplaces since the law took effect.
Of course, the ACA will also increase costs for some employers. And many smaller firms will find it difficult to afford to continue offering coverage, a trend that has been going on for several years.
However, it is clear that the predicted demise of employment-based health insurance under the ACA has yet to begin, and it may never arrive. And factors unrelated to the law, like changes in underlying health care costs, may turn out to be more important in determining health care’s direction.
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