I was speaking with a friend earlier this week about some changes his organization’s leadership team is debating related to health insurance for employees. There was a time in the past where this type of internal discussion would have made me a little uncomfortable; however, with the implementation of the Affordable Care Act, it would be crazy not to spend some time talking about how the market is changing, what trends are evident, and how to develop a strategy for moving forward.
Changing Perspectives
The single most important result of the ACA is this: perspectives are finally changing.
Consumers are starting to see insurance not as a free ride, but as a choice like any other. Instead of heading to the emergency room when you catch the flu, you’ll stop and think about what that might involve, what other options are available, and what you can do to minimize the cost and maximize the coverage for you and your family.
Here’s a good example of how the landscape is changing. Fifteen years ago, areas like telemedicine sounded more like science fiction than reality. And yet today you can video chat with a doctor on your tablet, discuss your symptoms, and have him electronically push your prescription to the pharmacy for pickup. The telemedicine tools that I have evaluated provided all of those benefits, were extremely low cost, and offered one key bonus—no reporting on the company’s group insurance claims experience.
In non-insurance speak, that simply means that any treatment routed through the telemedicine portal did not count against the company when it came time to evaluate annual premium adjustments. The more people/claims the company could shift to the telemedicine option, the less expensive premiums would be in coming years.
It’s one of many examples of how providing additional options has helped to open the market, provide better service for consumers, and keep the costs of medical insurance as reasonable as possible.
It’s Time to Break Up
For many years, those of us who provide an objective look at the industry were calling for some sort of separation of benefits from employer-provided to consumer-directed. It’s simple economics: when someone is paying a subsidized price for a good, they will use more of it. However, if the good is priced appropriately at the full market value, the consumer will purchase only what they need.
I’m not foolish enough to believe that companies will drop coverage completely in most cases. The recruiting and retention impact of such a move would be incredibly dangerous. However, now that employees have choices beyond those of their employers, it helps to bring more competition into the market, something that has been lacking (especially in my state of Alabama) for many years.
Shining a Light on Coverage
Because of all the change and uncertainty in the insurance marketplace, I believe corporate leaders and benefits managers are more discerning than ever before. No longer will they sit back, accept double-digit premium increases year over year, and do nothing about it.
Whether I’m a fan of the ACA or not, it doesn’t matter. What does matter are the changes in the marketplace and how they affect our businesses.
Is your company making drastic changes in the face of the ongoing ACA requirements? If so, how has it changed your perspective of the benefits marketplace? Do you think these changes are having an overall positive or negative impact? Why?
—Ben Eubanks, Associate HCM Analyst, Brandon Hall Group
@beneubanks
