According to a new study by the Urban Institute, small and large businesses could benefit from health reform but mid-size companies will see a jump in health care costs.

Medium-sized businesses—firms that have between 101 and 1,000 employees—would have seen a 9.5% jump in their total health care costs if the Patient Protection and Affordable Care Act had been fully in place this year, the study found.

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The report, prepared by Urban's Health Policy Center, was based on a simulation of the impact the law would have had on businesses in 2012, had it been fully in effect.

Researchers say small businesses would have seen their costs fall by 1.4%. Firms with more than 1,000 workers would have seen a 4.3% increase.

Higher costs stem largely from expanded coverage, the report says.

But, researchers note, the study estimates don't include the potential effects of cost containment initiatives in the PPACA or strategies available to employers to reduce their costs by modifying their contributions or benefits.

And despite fears that that health reform will cause employers to drop employer-sponsored coverage, the report says that it will actually do the opposite, increasing the number of Americans covered by employer-sponsored insurance by 2.7%. Overall, the Urban Institute claims, about 4 million more employees would have had health care coverage if the PPACA had been in place this year.

Previous reports have varied on their conclusions about what health reform will do to employer-sponsored coverage. An Employee Benefits Research Institute report released a couple weeks out found that employer-sponsored health coverage continues to decline.

The Urban Institute is a nonprofit, nonpartisan policy research organization.

This article was originally posted at BenefitsPro.com, a sister site of Credit Union Times.

Instant Insights /

Health Costs for Mid-Size Companies Will Rise Due to Obamacare: Urban Institute

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