The fact is employers often react to other employers when making big decisions. “When your competitor drops coverage, if you had no plans to do so, well now you might,” says Paul Fronstin, director of the health research program at Employee Benefit Research Institute. Just as the public relies “too much” on surveys, so do employers, he says. But more so, relying on these surveys in general does a real disservice, Fronstin says.

“There's lots of surveys out there. They all sort of get at the answer with all sorts of different means. Some of them find a very small percentage and some of them find larger percentages,” he says. “It may be that 1 percent or 3 percent or 10 percent or 34 percent of employers will drop coverage in 2014. But the real question is what does that trigger? What does it look like in 2015 if this happens, and in 2016 and in 2025?” he says. “It's not as much about what life looks like in 2014 but what it triggers. It's the dynamics over time that's important. You can't capture that in a survey.”

But the fact is those health insurance surveys are capturing one thing—attention. Take the McKinsey & Co. survey, which quickly went from being simple “routine, proprietary research” paid for by the consulting firm itself to a verbal fistfight between the firm and pretty much everyone who saw it. Their early 2011 survey of 1,300 employers found 30 percent of respondents will “definitely” or “probably” stop offering employer-sponsored health insurance after 2014.

But immediately after releasing the survey, Democrats jumped all over it, with Senate Finance Committee Chairman Max Baucus firing off a letter to McKinsey, and key House Democrats demanding the firm to release its methodology and questionnaire. The White House called it an “outlier” and urged people to look at it with a “grain of salt.” “The survey – and the Democrats' response to it – is no surprise.

It's not good PR for the Democrats and that's why they are challenging it so vehemently, in spite of the fact that McKinsey is a well-known and highly regarded consulting firm,” says John Conkling, vice president of national accounts, Fringe Benefit Group. The reason Democrats were so up in arms over the survey is because it goes against what President Obama and his supporters have been saying about the ACA: that if you like what you have in terms of health care, you can keep it.

The McKinsey survey suggests that won't always be possible, Fronstin says. In response to the attacks, McKinsey told Benefits Selling that they stood behind their survey and that they had no additional comment on the “controversy.” But after too much bad press, McKinsey released the full survey questionnaire June 20. After again insisting they stand behind their integrity and methodology, they conceded that the study was not intended as a predictive economic analysis, but rather as a study capturing the attitudes of employers.

But attacks continued. “As we learn more, it's become clear that this one flawed study from McKinsey is truly an outlier,” Nancy-Ann DeParle, assistant to the president and deputy chief of staff, said in a White House blog post. Baucus again blasted McKinsey for “unjustifiable explanation” after the consulting firm had released more information, and said that McKinsey reversed its position on its prediction. “McKinsey said its survey was not a prediction, but the plain language of the article certainly sounded like a prediction,” Baucus said in a statement.

Baucus also slammed McKinsey for asking “cherry-picked facts related to the Affordable Care Act” and concluded that McKinsey's failure to release all of the sources used in its article results in an incomplete picture for readers. Some conservatives spoke up, saying the Dems' attack was bullying at its best. “It's the classic Max Baucus playbook—harass those who he disagrees with, in an attempt to intimidate them into more favorable coverage,” Forbes wrote in response.

“Baucus did the same thing to insurer Humana in 2009, launching an investigation into the company because it had the temerity to inform its Medicare Advantage members that significant cuts were coming to the program.” But some researchers say it's not uncommon for surveys to come under attack.

“Speaking from a research perspective, if you are going to put research out in your name in the public domain, you need to be able to answer questions about your methodology and make that as transparent as possible,” says Bonnie Washington, senior vice president of Avalere Health.

“If you make results public, you can expect scrutiny about your methods and questions particularly putting estimates out in the world that are quite different from the conventional wisdom.” Scrutiny, though, is a typical political game: Attack, intimidate and question the creditability of the side you don't agree with. Conkling warns it's just the beginning of what we're going to see as the presidential election heats up. “We are going to see surveys from every side of the table analyzing how Americans feel about health care reform, financial reform, unemployment – they are all going to be hot political topics and quite controversial.”

McKinsey vs. all the others
In some ways, McKinsey expected backlash, initially noting that their survey found “a bigger effect than expected” percentage of employers whom planned to drop coverage for employees. They defied other organizations—the ones the White House used to prop up the ACA—including the Rand Corp. and the Congressional Budget Office, who had found there wouldn't be a significant change in employer-sponsored health insurance numbers resulting from the reform bill.

“The conclusions McKinsey reached differ sharply from results of other reputable, transparent research on the subject.  McKinsey's findings also counter what actually happened in Massachusetts when similar policies increased employer-sponsored health insurance,” Baucus wrote to McKinsey Consulting Company Managing Director Dominic Barton.

Shortly after McKinsey released its findings, others released their own—some which gave Democrats more ammunition in their claims that the survey was an outlier. Avalere Health concluded that large employers are unlikely to stop offering coverage in the near-term as the benefit to dropping coverage might not outweigh the costs for both the employer and their employees.

“Overall, our analysis suggests that the ESI market will be fairly stable after 2014 when key ACA coverage provisions go into effect,” the report says. “The microsimulation models estimates from RAND, the Urban Institute, the Lewin Group and the Congressional Budget Office show net changes to ESI ranging from negative 0.3 percent to positive 8.4 percent compared to baseline projections without ACA implementation – not major changes in the market.”

Avalere's report was a “survey or surveys,” analyzing all published research on this topic of how and whether employers will drop coverage in 2014 when reform kicks in. Washington noted that McKinsey's findings were not included in their report because at the time of its release, there wasn't enough information. Though if they conducted it again, they'd include McKinsey since they've since released its methodology, she says.

Research from the Benfield Group that came out in June also defied the McKisney survey stating that that most employers will continue to offer comprehensive health insurance benefits to their employers. This information comes after the group surveyed more than 100 jumbo employers (5,000-plus employees) in the United States.

Scott Thompson, president of employer practice for Benfield, says jumbo employers emerged as an important segment to single out because they “provide health care benefits to 58 million covered lives in the United States, or about one-third of all those covered by employer-sponsored insurance; [they] typically lead innovations in health care benefits and programs; and are both willing and able to drive change through the health care supply chain.”

Of those surveyed, just 7 percent of jumbo employers said they are considering dropping active employee health care coverage in 2015 and beyond. “Jumbo employers are working harder than ever to shore up coverage, manage expenses and provide compelling benefits to their employees,”  Thompson says.

It's the economy, stupid
But employers' decisions about health insurance for employees may have more to do with their own finances than with health care reform.  “I don't believe small businesses are dropping coverage now because of reforms that don't take effect until 2014,” says Alan Katz, president of the Alan Katz Group and past president of the National Association of Health Underwriters. “I do know groups have dropped coverage because of the economy.

So what we're seeing now is clearly driven by financial concerns, not health care reform.” According to EBRI statistics, workers in nearly all broadly defined occupations experienced a statistically significantly decline in health coverage between 2008 and 2009 due to the recent recession. “During a recession, some employers will drop coverage, some will increase the worker share of the premium, and some may change eligibility requirements,” the EBRI report says.

“Structural changes in the economy during a recession, such as the substitution of part-time workers for full-time workers, reduce the number of workers eligible for health benefits.” The fact that employers are dropping, or intend to drop, health coverage is ultimately due to financial concerns, Fronstin says. Still, “health care reform does enable different financial concerns because right now, employers provide these benefits voluntarily. They don't have to.

They've never had to, except in Hawaii and Massachusetts; there has been no mandate,” he says. “[Employers] spend on average $10,000 per worker with family coverage. They are already doing that voluntarily. And under the law that takes effect in 2014, if they don't do so, they are going to pay $2,000 per worker,” Fronstin continues. “Today, if they don't do so, they'll pay nothing per worker. “So to say this is because of health reform — it's still all about dollars and cents.”

And what if McKinsey is right?
The fact is the McKinsey survey could be right on target. “You can make the argument that employers are going to move in this direction [of dropping coverage for employees], and there's a good chance they will, but I think it's too early to tell,” Fronstin says. The only ones who know are employers who are making the decision—and it's all up in the air.

“I encourage everyone to look closely at who's sponsoring the survey – in most cases, someone is paying to have the study done, so who's agenda is it going to support?” Conkling says. So, there's a lot of studies coming out—but does it mean much? Not really, Conkling says. It's almost a moot point predicting something two to three years out when next year is a giant uncertainly.

“I talk to large employers every day and they are focused on 2012 renewals – the vast majority need to figure out what they are doing next year, and there is so much that's unknown about what we'll have to do in 2014,” Conkling says. “Take a look at the ridiculous waiver process for the mini-med plans, ongoing legislation to repeal the PPACA, status of health care exchanges – I seriously doubt that employers already know what they are going to do in 2014.

“They are focused on getting to – and surviving – in 2012,” Conkling says. Even Avalere's study said although it didn't look like there would be much change in employer rates in the near-term, it was significantly more uncertain in the long-term.  “While near-term changes in aggregate ESI rates are unlikely, longer term erosion—over 10 to 20 years— is possible,” the report says. That would be made even more probable if the state insurance exchanges called for in the law prove to be a better value than employer-sponsored coverage.

Avalere also cautioned that low-wage workers, small businesses and those with early retirees in particular are likely to turn to the exchanges for their coverage. Employers will ask about exchanges and have to compare the benefits between the exchanges and the employer plans. It's a question of what looks and works best for employers and employees.

“They'll look to see if they are a reasonable alternative to employer sponsored insurance, and I think that's going to take a little longer to figure that out,” Washington notes. “With so many reports coming out with so many different conclusions the only thing we know for sure is that one of them will be right,” Katz says. “But then a broken clock is right twice a day, so it's important to keep things in perspective.”