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New Studies Show Affordable Care Act Aids Employer Coverage; McKinsey Study Debunked

In the past 24 hours, two reputable nonpartisan organizations – the Robert Wood Johnson Foundation and Urban Institute – have released studies highlighting how health reform will help businesses provide health coverage for employees and one firm, McKinsey, finally conceded that their GOP-touted study was a “survey of employer attitudes” and not meant to be a predictive analysis of the law.

From Reuters, “U.S. Healthcare Law Seen Aiding Employer Coverage:

Even though the number of Americans with health insurance through employers has declined, most will continue to get coverage through their jobs after the new healthcare law takes full effect, studies released on Tuesday said

Julie Sonier, a senior researcher at the University of Minnesota who helped write the [Robert Wood Johnson] report, said the erosion in employer-sponsored insurance in the decade before the healthcare law was enacted underscored the need for action.

"When people don’t have access to employer coverage, they might get public coverage, they might be uninsured, there might be a higher uncompensated care burden at their local hospital. The costs are in the system somewhere," she said in a telephone interview.

A second study by the centrist Urban Institute said it expects the healthcare overhaul signed into law last year by President Barack Obama to help small businesses provide medical coverage to employees.

"Our results show significant health care cost savings (under the law) to firms with fewer than 50 workers, as well as a small increase in the number of people covered by their employer-sponsored plans," the Urban Institute study said…

"The evidence suggests the Affordable Care Act may have a stabilizing influence on small firm coverage," the study said.

The studies counter a recent report by Chicago consulting firm McKinsey that said about 30 percent of employers will "definitely" or "probably" stop offering health coverage once the state insurance exchanges begin operation, which are to provide a place for smal businesses and individuals to shop for health insurance coverage…

On Monday, McKinsey clarified that its report was a survey of employer attitudes and "was not intended to be a predictive economic analysis" of the impact of the new healthcare law. [6/21]

Now about that McKinsey study…  

Nearly 2 weeks ago, McKinsey released a controversial “report” that claimed 30 percent of employers would likely stop offering health insurance to employees as a result of health reform. While Republicans jumped at the chance to repeat this report’s findings – Democrats and others asked for more information about the methodology and design of the survey. Yesterday, McKinsey finally released the details and admitted it was just a survey and wasn’t meant to be predictive at all.

Greg Sargent, “Comprehensive study contradicts McKinsey’s findings:

…Avalere Health, an independent, nonpartisan advisory firm, has now published what may be the most comprehensive look yet at all the research out there on this topic, and it shows in the clearest terms yet that McKinsey’s findings constitute a major outlier.

McKinsey’s conclusion was that 30 percent of employers will definitely or probably stop offering employer-sponsored insurance after 2014. This has been widely repeated by Republicans and conservatives, even though other studies have found minimal impact and we have no way of evaluating the integrity of the research that produced McKinsey’s conclusion.

Now Avalere’s study of virtually all the research out there flatly contradicts this finding. It concludes: “Overall, our analysis suggests that the ESI market will be fairly stable after 2014 when key ACA coverage provisions go into effect.”…  

Bonnie Washington, a senior vice president at Avalere, tells me that the firm concluded that the studies finding that the ACA would have minimal impact on ESI are credible. “Most consultants are predicting fairly stable coverage after 2014,” she says.

Avalere’s study also flatly discounts the recent finding by Republican economist Douglas Holz-Eakin’s that many employers will drop ESI, finding his methodology wanting. [6/20]

Paul Krugman, “McKinsey Pulls Back the Curtain”:

McKinsey has now released some (not all) of the details from its mystery study. True to form, the company now claims that a study touted as evidence that companies “will” drop coverage was “not predictive.” Uh-huh.

So what do we learn? It was basically a poll — which is a really bad way to assess how firms will make decisions about whether or not to maintain health coverage.

It’s pretty clear that McKinsey was trying to drum up/scout out business, and someone had the bright idea of weighing in on policy debate on the Republican side. Bad idea, and nobody should be quoting this study for that purpose. [6/21]

Nancy-Ann DeParle in The White House Blog, “Not a Prediction”:

Recently, McKinsey and Company released a survey claiming that a significant number of employers will stop offering insurance to their workers in 2014. The survey left us with more questions than answers. The article from McKinsey was at odds with a series of respected independent analyses and McKinsey previously declined to release critical information about how the survey was conducted.

Today, McKinsey acknowledged that this report is at odds with these independent analyses and said the report was not intended to predict whether or not employers would offer health insurance. Here’s what McKinsey said today:

The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act… We understand how the language in the article could lead the reader to think the research was a prediction, but it is not.

…The Affordable Care Act will make health insurance more affordable and make it easier for employers to offer coverage to their workers. In fact, a new study released today from Avalere Health, a respected consulting firm, looked at the validity of the various analyses published on the subject and found that the employer-sponsored health insurance market will be stable after 2014 and that “large employers are unlikely to stop offering coverage …” And as we learn more, it’s become clear that this one flawed study from McKinsey is truly an outlier. 

Dan Pfeiffer, White House Communications Director:

@pfeiffer44: Now that McKinsey has said the study wasn’t predictive, will the news outlets that covered the predications in the study, run new stories?

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