The End of ACA 2017 and Beyond: Trends in Employer Paid Health Insurance

Posted On: December 4, 2016 | By: Abigail Cutler

We have a new president-elect who promises to change health care as we know it. It appears that the Affordable Care Act’s demise, at least in part, is at hand. So what’s next? I believe the employer mandate for the most part will cease to exist. Furthermore, the individual mandate will have a different look and feel, and it too may go away. What won’t go away is health insurance for the 20 million+ people who have signed up for the exchanges or Medicaid. The individual mandate poses a huge problem because, simply stated, it is a losing financial venture. At present, few health insurers are willing to take on the risk. The incoming administration is proposing block grants to individual states empowering them to deal with health care as they see fit. These grants can be used to insure those who are now in the exchanges. Whatever happens, it will be very interesting as the congressional and public debate begins.

I want to focus on employer sponsored health plans’ trends, predictions and strategic planning tools. Transparency will be even more important now, as employer- sponsored plans are being unleashed from the coinsurance limitations of ACA. With the introduction of more high deductible plans with potentially even higher out-of-pocket costs employees will need to become better consumers. Yet 42 percent of employees believe they don’t have the information they need to make important medical decisions. Astoundingly few employees who are offered price transparency tools actually use them. Strategically-minded benefits professionals will need to pair transparency tools with coaches who serve as a medical ally and help with consumer navigation.

Employers should want employees to spend theirs and the employer’s money wisely and go to high quality providers to get the care they need and not care they don’t need. To accomplish this, proactive employers must continue to turn to strategies like partnerships with organizations that offer consumer education and navigation. Employers need employees shopping around based not only on cost but also on quality.

The trend to pay for value will continue. It will pay all to be focused on a process to steer employees toward the health care with the highest quality and the most efficiency. Again, we want employees to be consumers, but they can’t do it on their own. They need the right benefit designs and the support to get them to the best quality facilities like Centers of Excellence. Paying providers well for quality makes sense. Value is particularly important when managing high cost claims.

Consider these facts:

  • The average high cost claimant costs $122,382 annually
  •  1.2 percent of all members are high cost claimants
  •  High cost claimants comprise 31 percent of total spending
  •  High cost claimants cost 29.3 times as much as members on average
  •  53 percent of the health care costs for high cost claimants are for chronic conditions, while 47 percent are for acute conditions
  •  The costliest claims include cancer treatments, heart disease, live birth, perinatal conditions, and blood infections

It only makes sense to find the absolute best Centers of Excellence renowned for delivering results. The name of the game here is employer intervention with employees’ health conditions that have related high costs.

Here are some tools to mitigate large claims through prevention and high quality value-based treatment:

  1. Mining health data to target certain chronic conditions
  2. Engaging beneficiaries to be active plan participants
  3. Implementing wellness programs with a clinical orientation
  4. Developing Health Insurance Portability and Accountability Act (HIPAA)-compliant, predictive biometric screening profiles
  5. Using care management to target the costs of particular diseases or procedures

The way I see it, the demise of ACA unleashes multiple strategies and the power of the free market. Competition makes for a better product and a better price. I expect to see good things happen.