But survey says it's on the verge of a major transformation
Even if the Supreme Court upholds the Affordable Care Act, an overwhelming majority of employers want to keep providing health benefits for their employees. But most feel the cost is unsustainable, and they display great interest in alternatives to traditional health insurance schemes, according to a survey of more than 1,300 employers and 700 employees conducted by the Health & Life Sciences practice at Oliver Wyman.
"Previous surveys focused on whether employers intend to drop coverage or not," says Mindy Kairey, a partner at Oliver Wyman and leader of the project. "But the question is more complicated than that. We wanted to understand why employers make the choices they do and to understand which types of new solutions will satisfy their needs."
Some other key findings of the survey include: Only 8 percent of employees are likely to drop employer-sponsored coverage, and fifty percent said they will continue to offer insurance but with major changes. The remaining 42 percent want to maintain the status quo.
In addition, two-thirds of employers believe that the cost of providing health coverage is unsustainable at current rates of medical inflation, and more than half said they would find it unsustainable even if medical inflation were cut by five percentage points.
Meanwhile, employers are interested in new solutions. When offered a private exchange alternative, 20 percent selected it even if no savings were involved, and an additional 60 percent said they would switch to save 10 percent on healthcare costs.
"Employers are very interested in alternatives to traditional insurance," says Kairey. "And their demand will only increase given their desire to continue to provide coverage to their employees. Private-sector insurance could still be a major part of the U.S. healthcare system—if health plans can quickly start demonstrating real improvements in value."
Employees, for their part, are willing to accept a change. In a related study, Oliver Wyman surveyed more than 700 individuals who currently receive their health coverage through employers. Almost two-thirds were less than satisfied with their current insurance arrangement and 90 percent said they were prepared to accept major changes if it saved them money.
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