Employers wary of public health plan option

The majority of U.S. employers say a public insurance plan option resembling Medicare is not a good solution for providing health insurance to those who do not have coverage.

In a survey of more than 1,100 employers in June, Aon Consulting found that 58% of companies oppose a public plan option to compete with employer-based plans. Under a scenario in which a government-run plan would be offered to everyone, 39% of employers said they would continue group health coverage but would re-evaluate the benefit after one to two years. Another 10% said they would drop sponsorship of group coverage.

The vast majority of respondents (93%) said a focus on wellness programs, evidence-based medical guidelines and initiatives to help consumers make more informed health choices is a better way to address health system reform.

"Employers are concerned about an uneven playing field between employer-based plans and a public plan, especially if the public plan is designed based on a Medicare-level reimbursement to physicians and hospitals, which is significantly lower than private-sector plans," said John Zern, director of Aon's U.S. health and benefits practice.

In addition, the survey found:

• 63% of companies oppose an employer mandate, which would require employers to sponsor group health insurance for their employees or else pay into a government fund.
• 76% said proposed changes in preemption under the Employee Retirement Income Security Act likely would lead to termination of health coverage options.
• The majority ranked changing or limiting the tax treatment of group health coverage sponsored by employers as the least preferred way to finance health system reform.

Zern said employers should place a high priority on developing comprehensive wellness and prevention programs regardless of the outcome of the national health reform debate.