AHPI Paper Reveals "Tipping Points" of Employer-Sponsored Health Insurance

March 23, 2018

This week, the American Health Policy Institute (AHPI) released "'Tipping Points' of Employer-Sponsored Health Insurance," which examines various factors that could impact broad-based employer-provided health coverage, including escalating costs and the implications of public policy changes such as a single-payer system.  As health care costs continue to rise, the question remains: how much longer can or will employers be willing to absorb the cost of sponsoring health care coverage for their employees?  If employers were to discontinue providing health benefits, would such a change be gradual or sudden—and will employers leave the health system voluntarily or be forced out?  The paper aggregates in one place the reasonable factors that might go into such analysis, including: 

  • Health care costs growing too large for employers to absorb;
  • Implementation of federal and/or state-run single-payer health care, enhanced subsidies, or a "public option";
  • Significant improvement of the individual marketplace;
  • State adoption of high-risk pools;
  • New, costly government insurance mandates; and
  • Changes in tax law and/or accounting treatment.
Henry C. Eickelberg, AHPI Senior Fellow and author of the paper, explains, "Trying to ascertain the tipping point at which employers would find it either necessary or desirable to end health care coverage for active employees is very much a process of weighing the alternatives.  Every employer faces unique challenges and will need to weigh each factor outlined in this paper differently."