Employers, Employees Concerned Health Reform Would Lead to Higher Overall Costs

A significant majority of employers believe that the current healthcare reform proposals in Congress would lead to higher costs for both employer-sponsored benefit programs and healthcare services overall, according to the survey conducted by Towers Watson and the National Business Group. The survey focused on 507 employers nationwide that employ a total of 11.5 million workers.

A separate survey of 1,000 employees at midsize and large U.S. companies found that a majority of workers also believe health reform leads to higher costs and would decrease the quality of care and benefits available to them, according to Towers Watson, a global professional services company.

"These survey data confirm quantitatively what many people—employers, employees and policy pundits—have been talking about for the past four months," said Helen Darling, president of the National Business Group. "That is, whatever else a healthcare reform plan might do, it is unlikely to control health care cost, which has everyone worried."

The health reform itself effort appears to be on a political backburner, reflected in President Obama’s State of the Union speech, in which he devoted only a small portion of his speech on the issue. The reform bill is still in conference negotiations with Senate and House members.

Highlights from the employer survey included:

• 71% say health reform will increase the overall cost of healthcare services and increase access to health benefit coverage
• 69% say it will increase the cost of their benefit programs
• 46% say it will decrease employer-sponsored retiree medical benefits
• 35% say it will lead to fewer employers offering subsidized benefits
• 34% say it will increase transparency of providers, and 30% say it will increase the transparency of provider quality
• 27% say it will lower healthcare quality

Highlights from the employee survey included:

• 67% say health reform would result in higher costs
• 54% say it would reduce their available benefits
• 53% say it would lower the quality of healthcare

"Although the status of legislative healthcare reform is currently in limbo, it’s clear that employers and employees alike are concerned over the potential impact reform could have on health costs and their benefit programs," said Ron Fontanetta, an intellectual capital development leader at Towers Watson Health and Group Benefits.

"While health reform could ultimately provide greater access to healthcare to more Americans, there is a fair amount of skepticism over whether health reform will be able to curb rising health costs," he said.