McKinsey Report: Act II

ACT II

This whole McKinsey report thing has been a mess, and a lot of publicity for McKinsey.  The McKinsey Report was a survey of more than 1,000 employer groups and found that approximately 30% would "definitely" or "probably stop offering employer sponsored health coverage to their employees because it could be less costly to send the employees to the exchange and pay a penalty, if any.  

The White House is still pushing McKinsey to release more information on the findings since the outcome of the McKinsey Report was so different from that of the Congressional Budget Office, RAND or Urban Institutes findings. 

McKinsey commissioned IPSOS, the third largest market and research firm in the world to conduct the survey.  The survey was comprised using employer groups ranging from less that 20 employees to more than 10,000 and from a pool of hundreds of thousands of people in IPSOS databases. 

There are many surveys and some will have countering views.  However, if I am an employer and paying $10,000 a year for my employees health care and they can go to an exchange and get it cheaper while I pay a $2000 penalty, I may just do that.  And so may many other employers.  However, many won't because they may believe that keeping their coverage intact, keeps them more competitive. 

I guess time will tell and we will see what happens in 2014.  Cause if you can't keep the plan you have, as the President promised, it may be big pill to swallow for many people. 

McKinsey Report: One Third Of Employers Will Drop Medical Coverage in 2014

Say what?  According to the McKinsey Report a full one third of employers will drop their health coverage because it will be so much more cost effective to pay a fine (or not) and send their employees off for subsidized coverage through the exchanges.  The report was based on a survey of over 1000 employer groups.  The problem is that the Congressional Budget Office estimated that the number will be closer to 7%.....whoops!  Naturally, once the White House got wind of this survey, they were none too happy. 

According to Nancy-Ann DeParle, Deputy Chief of Staff  posted on the White House blog June 8.......“Unfortunately, the [McKinsey] study misses some key points and doesn’t provide the complete picture about how the Affordable Care Act [PPACA] will strengthen the health care system and make it easier for employers to offer high quality coverage to their employees”. 

The White House is diligently trying to push McKinsey to release the scope and breadth of the the study to determine its legitimacy.  McKinsey is pushing back stating that the details of the study are proprietary and cannot be released.

This isn't over..................

McKinsey Quarterly