Study: Affordable Care Act Won’t Destroy Employer-Based Health Coverage

One of the most seemingly plausible claims made by conservatives about the healthcare reform bill Barack Obama signed into law last March is that the mix of new health insurance exchanges and subsidies for the middle class and poor will wipe out employer-sponsored health insurance–which covers over 150 million Americans. The logic: if businesses can shift costs to exchanges and the government, they will do so at every opportunity.

A recent study by McKinsey and Company, the most prestigious management consulting firm on Earth (although they’ve had some trouble recently), claimed that between a third and half of all employers would stop covering their employees.

Republicans have been citing the paper for weeks. “A recent employer survey by McKinsey & Co. found that more than half of all American companies are likely ‘dump’ their workers into the government-run exchanges,” wrote former McCain and Bush economic adviser Douglas Holtz-Eakin in last Thursday’s Washington Post. “[T]he annual cost of Obamacare would increase by $400 billion by 2021.”

But the firm acknowledged today in a statement that their analysis was not scientifically valid. “The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act,” it said, according to the Post‘s Greg Sargent; “comparing the McKinsey survey to economic estimates, such as the CBO’s, is comparing apples to oranges.”

Sargent notes that researchers have more rigorously studied the question McKinsey was trying to answer, and they came to a completely different conclusion. The independent firm Avalere Health surveyed the literature and concluded that the broad majority of economic consultants have found that “most employers will remain committed to providing coverage,” when the healthcare bill, which was inspired by years of centrist Republican research, finally goes into effect.