Estimates of Health Reform’s Effect on Employer-Sponsored Insurance (ESI)

Avalere Health provides a nice summary of some of the estimates of how health reform will affect the rate at which employers offer health insurance.  The provisions which may have an impact on health insurance offering include:

• Free-rider penalties (+)
• Exchanges (?)
• Medicaid expansion (-)
• Individual mandate (+)
• Small business tax credit (+)
• Insurance market reforms/grandfathering (-)
• High-cost plan excise tax (-)

Using different methodologies and data files, a variety of reputable research firms have arrived at differing conclusions on the impact of health reform on ESI. Here are six estimates ordered from most negative to most positive impact:

• Holz-Eakin: -22.3%
• Booz Allen Hamilton: -4.5%
• Congressional Budget Office (CBO): -1.9%
• The Lewin Group: -1.8%
• Urban Institute: Little net change
• RAND: +8.7%

Sources:

• Ahlquist, G., Borromeo, P. et al. (2011) The future of health insurance: The demise of employer-sponsored coverage greatly exaggerated. Booz & Company;
• Congressional Budget Office.  Score of the Patient Protection and Affordable Care Act.  March 20, 2010;
• Eibner, C. Girosi, F. et al. (2010) Establishing state health insurance exchanges: Implications for health insurance enrollment, spending, and small businesses. RAND Corporation.
• Garrett, B. & Buettgens, M. (2011) Employer-sponsored insurance under health reform: Reports of its demise are premature. Urban Institute and Robert Wood Johnson Foundation.;
• Holtz-Eakin, D. &  Smith, C. Labor Markets and Health Care Reform: New Results.  American Action Forum. May, 2010;
• The Lewin Group. Patient Protection and Affordable Care Act (PPACA): Long Term Costs for Governments, Employers, Families and Providers; June 8, 2010.