We have written extensively about the fact that the Affordable Care Act (ACA) has and will continue to transform the employer sponsored group medical insurance industry. Whether public/private exchanges, legal challenges or general regulatory revisions, benefit professionals and employers alike are dealing with ways to strategize and comply with the ebb and flow of the law.
One question we frequently hear from the C-suite is “Where is this all going?” Our diplomatic response is “No one really knows.” Our provocative response is “It is a race to the individual consumer and the end of employer sponsored healthcare insurance.”
Imagine that… an employee benefit brokerage organization proclaiming the end of employer sponsored healthcare. Is this provocative or a likely outcome? Let’s look at the Law, the Payer’s and the Providers driving the industry to see what we might learn.
Affordable Care Act (ACA): Though the law came packaged with a lot of promises, including the adjective “affordable,” it seems clear for most employers that in the short term (new taxes) ACA has increased costs. Add this to several years of double digit trend increases and the level of fiscal battle fatigue has never been greater. The final tipping point may be the application of the 2018 Cadillac Tax. If employers are forced to absorb three more years (2015, 16, 17) of double digit increases and the potential for a 40% excise tax, we could see the beginnings of a stampede toward the exits.
Insurance Companies: Here at OneDigital Hartford, we periodically get an opportunity to hear directly from senior management executives of the large insurance companies regarding their vision with respect to ACA. In general, all of them are investing in tools and capabilities that enhance the individual consumer experience (online and mobile technologies; private exchange, health supportive capabilities, telemedicine etc..) and trying to establish their brand in the individual marketplace.
In addition, we see all carriers looking to establish their own exchange as well as expand participation in targeted public exchanges nationally. All of these activities seem to position them better with the individual consumer.
Providers: ACA has spawned the advent of new provider payment and alignment structures -- Accountable Care Organizations (ACO’s) and Patient Centered Homes (PCH’s). These new constructs look to improve integration of providers in the delivery and coordination of care while rewarding them for quality outcomes versus volume. Hospital systems, physician practices and insurance companies all are testing the waters in an effort to retool the healthcare payment system. In addition, some of these organizations are looking to market themselves direct to employers and or individuals.
So if all three of the significant gravitational forces (Law, Provider, and Payer) in healthcare are driving toward the individual, shouldn’t employers strategic planning contemplate this trend?
If you are interested in exploring this topic further, please join for our next event.