Report: One-third of employers will drop health coverage in 2014

Pills on money symbolizes costs of U.S. health care

BOB MOON: In a U.S. appeals court in Atlanta today, the Obama Administration will be defending last year's health insurance reforms. Earlier this year, a Florida judge ruled the President's Affordable Care Act overstepped the administration's authority when it mandated individuals buy health insurance.

Meantime, a new report says a surprising number of companies will drop health benefits for their workers as the law takes effect.

Marketplace's Amy Scott is here with details. You've read the report, Amy -- what does it say?

AMY SCOTT: Well, the headline is that 30 percent of employers will definitely or probably stop offering employer-sponsored insurance after 2014. That's when several of the big provisions of the law kick in. I should say that this report comes from the consulting firm McKinsey & Co. And figure is even higher -- more than 50 percent -- for employers with a "high awareness" of the changes coming. So that would leave a lot more workers to buy their own insurance with government subsidies than predicted. The Congressional Budget Office had estimated that only about 7 percent of workers would have to do that.

MOON: And is that a success? More companies taking advantage of the health care reforms?

SCOTT: Well, of course it depends how you define success. For one thing it suggests that more costs will shift to the government. But you know, for some employees, the report says that the cost of buying insurance on subsidized state exchanges will be lower than what they're paying toward insurance at work right now. And what was surprising is that more than 85 percent of workers said, you know, they'd stick around at their jobs even if their employer stopped offering benefits. They would, though, expect to get more pay or other benefits in return, but some of that of course would have to go toward buying their own insurance.

SCOTT: Marketplace's Amy Scott. Thanks.

SCOTT: You're welcome.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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