New Study Confirms: Health Law Will Raise Costs, Lower Coverage for Employers
Consulting firm Towers Watson is out with a new study today of large employers and their response to the health care law. The major findings are interesting, but not at all surprising, to Republicans who raised these concerns months ago:
- “The overwhelming majority (90%) of employers believe health care reform will increase their organization’s health care benefit costs;”
- Only 14% of firms surveyed believe the law will contain health care costs for the nation as a whole;
- More than two in three firms (68%) plan to re-examine their health benefit strategy for active employees this year;
- Nearly nine in ten firms (88%) plan to pass increased costs from the law on to their employees through higher premiums;
- Nearly three in four firms (74%) plan to pass the law’s higher costs on to their employees by changing plan options, restricting eligibility, or increasing deductibles or co-pays;
- More than one in ten firms plan to pass on the law’s higher costs by reducing employment (12%) or reducing employer contributions to retirement plans like 401(k)s (11%);
- More than two in five firms (43%) believe their plans will be subject to the “Cadillac” tax on high-cost plans, with a further 6% saying they are unsure whether their plans will be subject to this new tax;
- Of those firms offering coverage, 43% are “likely to eliminate or reduce retiree medical programs” as a result of the law’s enactment.
So in sum, the assessment of these employers is bleak – higher costs, higher premiums and co-pays for workers, fewer jobs, smaller retirement contributions, additional taxes, and fewer workers and retirees covered. Is this what Speaker Pelosi meant when she said we had to pass the health care bill to find out what is in it?