Posted 9/30/2013 12:00 am
Updated 6 months ago
It’s that time of year again: I’ve been notified of the upcoming meeting of my company’s benefits committee at which a few of us will consider the options and then decide which health insurance policy our co-workers will be offered.
As usual, I will offer to resign from the committee because I don’t enroll in the company insurance plan. My husband works for a much larger company, so we can get a better deal on family coverage through his employer. I hate being in the position of choosing for others a vital product when I don’t have to live with the consequences of that decision.
It could be worse and has been. Before Arkansas’ “any willing provider” law finally took effect a few years back, the committee was literally choosing which doctors our co-workers could afford to see.
For all of the changes that Obamacare will bring, starting with the opening of the Health Insurance Marketplace this week, this isn’t going to change: the artificial connection between where one works — especially the size of the company — and the cost and quality of one’s health insurance. In fact, Obamacare has cemented that relationship more firmly than ever.
It was with this dreaded chore looming that I read Matt Miller’s opinion column in the Washington Post last week. In it he quoted Canadian business tycoon David Beatty, a satisfied beneficiary of his country’s single-payer system, as wondering why U.S. companies “want to be in the business of providing health care anyway.”
I know I don’t.
There’s growing evidence that some corporations really don’t want to be in that business either. You may have noted that Walgreen Co. will abandon its traditional self-insurance come 2014 and will instead send its 180,000 employees and their dependents into an online health insurance exchange operated by Aon Hewitt.
Walgreens employees will be given an allowance to spend and then allowed to choose from a couple of dozen different plans, able to decide for themselves how much more they want to kick in for lower deductibles and the like. That’s not as hassle-free as the Canadian way, but it sounds promising to me.
Walgreen is the largest of 18 corporations that have signed up for the Aon Hewitt Corporate Health Exchange. Mercer, the benefits consultancy that is a subsidiary of insurance giant Marsh & McLennan Cos., is offering its employer-clients a similar product. Launched in January, Mercer Marketplace lined up five initial corporate participants. None was identified, but Mercer said they range from 800 to 25,000 employees.
It’s not clear from my reading whether these exchanges function as a single insurance pool or whether each employee group is priced separately. The former sounds better to me, since larger pools are less sensitive to large claims.
Either way, the idea of letting — forcing, really — employees to muck around in the details of their benefits could be a good thing on balance. Insurance plans are, after all, regulated. The offerings are fairly standard. And to get the subsidy from their employers, the employee will actually have to buy insurance. Choosing from a menu of available health insurance plans shouldn’t be much harder than buying car insurance.
In other words, turning this choice over to mere mortals does not seem as risky as counting on rank and file employees to do a good job with their 401(k)s.
I also like the idea of having employees see just how much health insurance actually costs and how much options, like a higher deductible, can change the price. “Skin in the game” is a cliché, I know, but the American health care system has been immune to market forces because the costs have been effectively hidden.
The biggest question is whether the employer subsidy will keep pace with premiums.
But there’s actually good news on that front. Earlier this month, the Wall Street Journal reported that health care prices in July were only 1 percent higher than a year earlier. Health care inflation over the past year has actually been slower than general inflation, a sentence I don’t think I could have truthfully written at any point in my adult life.
Here’s a sentence from the WSJ article: “The recent slowdown in medical inflation is partly the result of less-generous health plans forcing patients to pay more attention to prices, doctors say.”
Now why didn’t anyone think of that sooner?
Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.