Under fire from Democrats in Congress, consulting firm McKinsey & Co. today released its methodology for a controversial survey that found as many as 30 percent of employers might drop health insurance after the new health law takes effect in 2014. But the hot water McKinsey's in doesn't seem to be cooling off.
From the start, the survey raised eyebrows because its findings were so at odds with other studies that predicted far fewer employers would drop insurance for their workers. McKinsey acknowledged in its original article about employers' possible reaction to the law's implementation that "our survey educated respondents about its implications for their companies and employees before they were asked about post 2014 strategies."
What that "education" was, however, was unknown. Until now, that is.
It turns out that in question 41, employers were told, "Assume exchanges become an easy, affordable way for individuals to obtain health insurance." Then they were given examples of how much low and moderate-income workers would likely have to pay for that insurance, given the availability of federal subsidies. (Hint: Not that much; the maximum annual premium for a family of four earning $44,100 is likely to be around $2,778, they were told.)
"Given this information, how likely do you think your company would be to discontinue employee health coverage?" they were then asked. That question alone prompted 36.6 percent of small (fewer than 49 worker) businesses to say they would definitely or probably stop offering coverage and 26.3 percent of larger firms to say the same thing.
Still, McKinsey insisted that it did not intend its survey – which was conducted for its own use, and not at the behest of any particular client – to be used "as a predictive economic analysis of the impact of the Affordable Care Act."
The statement from the company read, "We understand how the language in the article could lead the reader to think the research was a prediction, but it is not."
And after two weeks of complete silence, McKinsey now says the survey has its full backing. "We stand by the integrity and methodology of the survey," the company said.
But critics are anything but assuaged. "This report is filled with cherry-picked facts and slanted questions – it did not provide employers with enough information for them to make honest choices and fair evaluations," said Senate Finance Committee Chairman Max Baucus, who was one of the first to demand the McKinsey release its methodology. "Rather than correct the major deficiencies in their report, McKinsey has chosen to again stand by their faulty analysis and misguided conclusions."
Meanwhile, yet another study is out today that conflicts with McKinsey's take on the matter. Avalere Health, a Washington-based consulting firm, did its own its own interviews and examined existing studies, and concluded that the overall market for employer-provided health insurance "will likely remain relatively stable after 2014," when the law takes full effect.
Said Avalere, "Stability in (employer-provided insurance) is driven by expectations that large firms, whose policies cover more people than small- and medium-firm policies combined, will continue offering health benefits" as well as the likelihood that smaller firms will take advantage of new opportunities afforded them to purchase lower cost insurance under the law.
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