Enacting the health care reform will lead to higher health care costs

Sep 25 2009

A vast majority of employers anticipate that, if enacted, health care reform will lead to higher health care costs and weaken their role in providing coverage to workers, according to a new poll by Watson Wyatt, a leading global consulting firm.

The Watson Wyatt poll of 160 employers conducted in mid-September found that 73 percent believe health care costs will increase if health care reform legislation is enacted. Even more (86 percent) think the health care proposals being considered would weaken the role employer-sponsored plans play in health care coverage.

"Both Congress and the White House have said repeatedly that health care reform should build on the employer-sponsored system," said Ted Nussbaum, North America director of group and health care consulting at Watson Wyatt. "However, most employers are apprehensive that the outcome will be quite different."

The poll also found little employer support for proposals that would tax benefits or mandate employer coverage: Fewer than three in 10 (29 percent) would support a tax on high-income employees with high-cost plans, while fewer than one in five (19 percent) would support a tax on insurers of high-cost plans. An even smaller percentage -- 11 percent -- would support taxing employer contributions to health care as income.

On expanding access, the poll found that only 10 percent of respondents would support an employer mandate, while half (50 percent) would support an individual mandate. Ten percent would support both, and 30 percent would not support either.

"Escalating health costs have been top of mind for employers for years now, but the reform debate has pushed this issue to a critical point," said Nussbaum. "While the national debate centers on options for expanding coverage and ways to generate revenue to fund reform, employers are concerned that health care costs will rise even higher as a result of the new legislation."