Study: Midsize Firms Embrace Health Reforms of Their Own Ahead of Obamacare

Some business leaders get ahead of the game on health reform.

A woman looks at the insurance exchange internet site Oct.1, 2013, in Washington, D.C.

Many state-run health insurance marketplaces are performing better than the federal version,


Many of the stories emerging about the effects of President Barack Obama's health care reform law, the Affordable Care Act, are nightmares – people can't sign up for coverage, companies are finding ways to get out of offering employees health plans and millions have seen their current health plans canceled because they didn't meet the law's minimum standards.

But leaders in the world of midsize businesses ­– those with annual revenues from $10 million to $1 billion –­ say their path to financial success lies in embracing their own innovative health reforms ahead of national law, according to a new study from Fisher College of Business at The Ohio State University, sponsored by GE Capital.

"While conventional wisdom might suggest that firms would likely drop employee health insurance as a way to mitigate any rising costs associated with health care reform, middle market firms offer a contrary perspective," says the report, released Thursday. "Cutting health care insurance was identified as the least likely strategy to be implemented out of all those listed in this survey…instead of dropping coverage, middle market firms are seeking ways to keep and improve it."

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Middle-market firms only make up 3 percent of U.S. companies, but one-third of U.S. private sector GDP and jobs. According to the study, 80 percent of mid-market executives see health care as the companies' responsibility to their employees and a key part of maintaining a productive workforce. About 90 percent said offering quality health benefits helps attract and retain talent.

Though Obamacare has been mocked, ridiculed and loathed by Republicans and some business leaders, small and large, part of its reforms were pulled from best business tactics already embraced by industry, such as wellness programs and preventative medicine. For years, many large companies who self-insured sought to cope with rapidly rising health costs by encouraging their workers to practice healthier living by offering premium reductions or cash bonuses for participation in programs such as smoking cessation and gym memberships.

Rising health costs continue to be a threat to any businesses' ability to remain profitable, a concern constantly raised by opponents of the new health law. Facing political pressure amid stories of companies pushing full-time workers into part-time roles or making layoffs, the Obama administration announced a one year reprieve from the requirement that all companies with 50 or more employees provide health plans or pay a fee per employee. But according to the study, many mid-market companies are not waiting to comply with the law.

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"Middle market firms are engaging in a host of strategies to meet the challenge of health care; the one thing they are not trying is standing still," the study says. "With health care reform implementation beginning and the cost challenges of the recent past continuing, the firms that will be successful are those that lean into the challenge and engage and experiment to reduce cost and improve outcomes."

It remains to be seen whether the fully implemented law will end up accomplishing the president's goals of slowing the growth of health care costs and making health insurance more ubiquitous and affordable or whether it will live up to the reputation of its harshest critics and bury companies in over-regulation and jack up the cost of coverage for wide swaths of Americans.


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Corrected on : Updated 11/21/13: This article has been updated to clarify the position of midsize businesses on Obamacare.