"Health Insurers Predict Employers Will Continue Offering Coverage Under New Health Law"

Health Insurers Predict Employers Will Continue Offering Coverage Under New Health Law

Throughout the health care debate, the President repeated the oft-cited claim that ‘if you like the coverage you have, you can keep it,’ while conservatives insisted that the new health care law would undermine employer-based coverage and force everyone to purchase insurance in the new state-based exchanges. The Congressional Budget Office (CBO) assumed that the truth was somewhere in the middle and predicted that “the number of people obtaining coverage through their employer would be about 3 million lower in 2019 under the legislation.” The Center of Medicare and Medicaid Services estimated that just 1.4 million would move out of employer coverage.

On Friday, speaking at an investor conference in New York, UnitedHealth CEO Stephen Hemsley and CIGNA CEO David Cordani sided with Obama and said that a relatively small number of companies would push their employees into the exchanges:

“We don’t expect, nor would anyone else who’s modeling this actually expect, that kind of migration” into the exchanges, Mr. Hemsley said. Businesses “have thought about the fact that they can manage their costs more effectively.”

CIGNA Corp. CEO David Cordani, in a separate presentation at the same Sanford C. Bernstein & Co. conference, said it is unclear how companies will respond to the health care law. Some may decide it is cheaper to let people buy on their own through the purchasing exchanges, he said.

The online marketplaces open in 2014. Employers will spend the next three to five years weighing options, Mr. Cordani said.

“Will there be a de minimis effect” on the large-employer market for insurance? “We don’t think so,” Mr. Cordani said.

The CBO speculated that a somewhat complex interaction of factors will lead to a small net reduction in employer coverage. Approximately 6 to 7 million more Americans would demand coverage from their employer, 8 to 9 million people would lose coverage and enter the exchanges and 1 to 2 million would leave their employer-based coverage for the exchanges.

Health care policy wonks have speculated for years about why employers prefer to offer insurance and have argued that moving Americans out of employer based coverage and into some kind of regulated insurance plan would result in a more efficient system. The health care law takes small steps in that direction, but if the insurers are to be believed, the employer system may be around for far longer than many expected.

http://wonkroom.thinkprogress.org/2010/06/07/employer-continue-insurer/