Planning For The Future: What Do We Do If…?
Originally Published in RMP Advisor, December 2009None of us can predict the future with certainty, but we can and should try, given our responsibility to plan our company’s future. In that regard, we offer our readers some suggestions based on alternative health reform scenarios and the employer’s role as purchaser of health benefits.
Remember that one size does not fit all…. A desirable strategy for any particular organization will depend on their size, risk tolerance, employee relations issues, and other factors. With that in mind, let’s answer some hypothetical questions about “What do we do if the government…?”
- Creates A New Public Health Insurance Option. The earliest date for a new public option (NOT an expansion of Medicare) is 2013. At that time, you would want to evaluate the benefits and costs of your current health insurance against the benefits and premiums associated with the new public plan. It’s just another option for your consideration. Between now and then, seek out the best plan(s) for your company at the lowest possible cost.
- Expands Medicare Coverage. IF this happens, the option will initially only be available to uninsured individuals between the ages of 55 and 64, so will most likely not have an impact on most businesses (except for your taxes).
- Eliminates Exclusions For Pre-Existing Conditions. Small employer groups and individual purchasers of health insurance will have reason to celebrate, as purchasing will now likely take place through a health exchange with multiple options. If you are a group of 20 or more employees, you are not currently subject to individual underwriting, so there is no impact.
- Creates Health Insurance Exchanges. These purchasing exchanges will be beneficial for those groups to whom access is granted. Instead of working with a single carrier and a choice of one or two plans, employers will have access to multiple carriers and multiple plans, which increases competition. Take advantage of this program if you can.
In addition, there will be tax credits and direct subsidies; new regulations (e.g., mandates for providing coverage), restrictions, and reporting requirements; the opportunity to take advantage of purchasing groups and/or association health plans; and the responsibility to engage your employees as effective consumers of healthcare services. It will undoubtedly be a new, regulatory mess, but one that will have to sorted out over time.
The bottom line…not much actually changes for employers in the next 3 to 4 years. As such, an employer’s interests are best served by becoming a smarter purchaser of health benefits. Instead of simply purchasing your health insurance in 12 month increments, we suggest a multi-year strategy. It is important for your employees to have “skin in the game”—incentives to become better consumers of healthcare. You CAN shift the balance of power away from the insurance companies and in your favor WITH an effective purchasing strategy.