In your dreams--they may eliminate the benefit but I find it a hard swallow they will increase the pay only the profits. Eliminating the benefit could drive the insurance (and control of the insurance companies) down as so many would not be covered by benefits and not be able to afford to pay premiums. This might be a good thing EXCEPT the movement is to a national healthcare and I don't see how it will be stopped.
I'm not sure what you mean by driving insurance down would reduce the numbers covered.....
Anyway, if a company wants to attrack the best employees they will up the pay if they eliminate the benefit. To many people don't consider their benefits as compensation, they consider them entitlements. At least then employees would have ownership in their benefit selection and an interest in tayloring it to their needs. The costs would then reflect their choices.