Will Nonprofits Drop Health Insurance after Health Care Reform?

Print Share on LinkedIn More

January 15, 2011; Source: New America Foundation | Why oh why can't public policy makers and researchers remember that nonprofit employers have a big stake in the Affordable Care Act (ACA) — the formal name of national health care reform — not just as service providers and advocates, but as employers? 

A controversial new study from the McKinsey Institute contends that 30 percent of employers will stop offering employer-sponsored health insurance (ESI) after 2014 when the national health care reform program fully kicks in.  Apparently, the proportion jumps to 50 percent for employers who exhibited "high awareness" of health care reform provisions, and 85 percent of employees would stay in their jobs even if employers dropped ESI.  

House Speaker John Boehner's office immediately pronounced the McKinsey findings as proof that employers would dump ESI "en masse," while numerous other sources, including the New America Foundation, eviscerated the McKinsey methodology. A January 2011 report from the Urban Institute, also written by a McKinsey guy, suggests that ESI isn't DOA in 2014. Our brief review of the McKinsey controversy leads us toward seeing the McKinsey research as almost akin to a push poll, methodologically dubious to say the least.

But our concern isn't pro or against the McKinsey analysis.  Our concerns apply to the Urban report and others too. Once again, the nonprofit sector is back to the future. No one talks about nonprofit employers and how nonprofits will fare under or react to the ACA. The Urban analysis talks about small firms, which admittedly is the category into which most nonprofit employers fit, but small nonprofits are different than small for-profits.  The Urban study says that, "Total spending by small firms would be 8.7 percent lower, mainly due to cost savings from the new ESI (SHOP) exchanges" and adds that the average employer contribution per person would decrease by 7.9 percent for small employers. Can nonprofits feel secure in that or not? Or should they imagine that they are making the business decisions of the undisaggregated employers in the McKinsey analysis?

Nonprofits want to know where they stand. Policy-makers, researchers, repeat after me:  Nonprofits are employers too.—Rick Cohen