Employer study shows Obamacare’s true cost

The consulting firm McKinsey and Co. recently released a widely reported survey that said almost a third of private-sector employers reported they will drop employee health insurance coverage when Obamacare’s government-managed insurance exchanges come online in 2014. The survey results exploded two major promises repeatedly made during and after the health care debate: “If you like your health plan, you can keep it,” and, “It will not add one penny to the deficit.”

Obamacare supporters reacted with fury to the McKinsey results. Nancy-Ann DeParle, White House deputy chief of staff for policy, called the results an “outlier” and questioned whether the survey’s respondents understood the plan. Sen. Max Baucus, D-Mont., sent McKinsey a threatening letter demanding that the firm reveal its survey methodology. And The New York Times’ Paul Krugman accused McKinsey of having “a skewed sample” or “no real data at all.”

Now McKinsey is having its day and answering Obamacare apologists by posting all 29 pages of the survey questions, along with 206 pages of cross tabs. It turns out that some of the unreported responses in the survey are even more damaging to Obamacare than the original McKinsey report indicated.

First, far from being based upon a skewed sample, as Krugman charged, the survey reached 1,329 employers from 48 states (only North Dakota and Vermont were missed) representing every industry category and all firm sizes. Second, the respondents were exactly the type of people that will be making employer health insurance benefit decisions come 2014. The top five job descriptions of respondents were: owner, head of human resources, head of procurement, CEO-president and vice president of compensation.

Contrary to White House claims, the McKinsey cross tabs show the more these decision-makers know about Obamacare, the more likely they are to drop their employee health care plans. Among those most informed about how Obamacare would affect their business, 58 percent said they would either definitely or probably drop employee care. By contrast, only 16 percent of the best informed said they were planning to keep their plans. Thirty percent were undecided.

These survey results mean Obamacare will be vastly more expensive than the Congressional Budget Office claimed. The CBO’s computer models calculated Obamacare’s costs on the assumption that only 7 percent of employers would drop their employee health plans. If the percentage is closer to 30, as the McKinsey survey results predict, Obamacare’s price tag would rise by almost $1 trillion.

Or, to put it bluntly, the McKinsey survey makes clear that Obamacare’s cost is unsustainable.

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