Budget Analysts: Group Health Likely to Survive PPACA

“There is clearly a tremendous amount of uncertainty about how employers and employees will respond to the set of opportunities and incentives under that legislation,” the analysts say. “Assessing the effects of broad changes in the nation’s health insurance system requires assumptions and projections about a wide array of technical, behavioral, and economic factors.”

Changes in the assumptions fed into the forecasting models lead to changes in group plan enrollment and budget impact predictions, the analysts say.

But the analysts also reject the idea that PPACA will obviously lead to huge drops in group plan enrollment.

Even if the predictions turn out to be wrong, the effects of some errors could offset the effects of other errors, the analysts say.

The analysts suggest, for example, that PPACA-caused drops in group plan enrollment could end up making commercial group health insurance more attractive, by lowering the cost of group health coverage.

Employers participating in some surveys have indicated strong interest in dropping group health coverage, but the survey results conflict, and “it is doubtful that any survey conducted today could provide very accurate predictions of employers’ future decisions,” the analysts say. “Responses to such surveys have no consequences for the responders, do not require careful analysis or extensive deliberations, and are necessarily based on limited information about the various ways that [PPACA] will affect the market for health insurance.”

The analysts note that they have not yet analyzed how the Massachusetts health system change law, which resembles PPACA in some ways but differs in others, has affected that state’s group health plan market.

“Still, it is noteworthy that employment-based health insurance coverage appears to have increased in Massachusetts since that state’s reforms were implemented,” the analysts say.