The Employee Benefit Research Institute held a policy forum last December in Washington, D.C. (where you'll hopefully be attending our expo this year). EBRI released expert opinion about health care legislation being debated in Congress, and - albeit months later - their views still resonate.
The forum assembled economic, benefits, management and labor experts. Here are a few of the highlights provided by EBRI:
Even though the provisions in the Senate bill would likely have little impact on the large-employer health insurance market, "there are a number of changes that are going to make everyone's coverage more expensive," such as the excise tax on "Cadillac" health plans, the penalty on employers for not offering a health benefit, and taxes on health insurers.
- Alissa Fox, BlueCross BlueShield Association
The plan for a $750 per worker penalty for employers that either drop or do not offer health benefits has many employers at least considering the offer, since it would be a huge savings over what they currently pay for health coverage.
Moving from a group insurance model (where risks are pooled and premiums are averaged) to an individual health insurance model would most negatively affect older and longer-service workers which means senior executives would personally experience huge health premium increases.
Ultimately, dropping benefits is a cost-saving incentive. But no employer wants be the first to admit they've gone ahead and done it. "I have talked to over 100 employers who have expressed a desire in being the second large employer to drop health insurance benefits. I've not yet heard a single employer say that they are willing to be the one that does it first, that they're willing to be the one that is on the front page of The Wall Street Journal and take all the flack for leading the way."
- Jeff Munn, a benefits consultant with Hewitt Associates
Public opinion on health care reform is "schizophrenic." People "are plenty happy to complain about stuff, but they give their own health insurance high ratings." Given clashes and ambivalence about health coverage, "you're going to be able to manipulate that public opinion."
- Claudia Deane, associate director of public opinion and survey research at the Kaiser Family Foundation
The penalty on firms for non-coverage or if a low-income worker gets coverage through an insurance exchange would be tied to family income, rather than a workers' wage. It therefore has potentially major administrative and financial ramifications for employers. The impact would vary by low-income versus high-income areas of the country and low-wage versus high-wage industries.
Ancillary programs such as disease management, employee assistance programs, wellness programs and value-based insurance design are also flawed. "The theory that you can spend more now to save money later in health care is just wrong. If you want to spend less in health care, you should spend less in health care."
Major savings in health coverage costs could be achieved by employers moving to limited networks (perhaps for certain benefits, such as radiology and lab), tighter medical management, and limited or no out-of-network benefits. "Fundamentally, there's almost nothing in the legislation that's going to improve the health care delivery system. "
- Bruce Pyenson, principal and consulting actuary with Milliman, Inc.
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"Health care reform can work," but it's not just about getting everyone into the insurance pool it's about changing the way health care is delivered. Health reform bills address coverage and payment but not cost. "Things that we're doing now aren't changing those underlying fundamentals about what's broken in the system."
- Jeanne Denz, General Mills
Three in five Americans rank the health care system as either fair or poor. "It's interesting to note that our confidence in things getting better in the future is not there when it comes to health care."
- Mathew Greenwald, principal of Mathew Greenwald and Associates, who reported on results from the 2009 Health Confidence Survey (HCS)
The "pay-or-play" proposal would force many employers to provide coverage (or payment) for their part-time workers That's a "big hit" for retailers, where fewer than half offer health benefits.
The so-called "Cadillac" health plan tax would affect about 20 percent of employers by 2013. If that happens two-thirds of employers surveyed by Mercer said they would be forced to reduce their health benefit in order to control costs.
"Even though shifting costs may not be their preferred method of cost management, they will go ahead and cut benefits if that's what it takes to avoid an additional tax."
- Beth Umland, head of Mercer's health and benefits research unit, who presented results from the annual Mercer Employer-Sponsored Benefits Survey
"As you look at the composition of your work force, there really isn't any such thing as an average employee. You're going to have cohorts of employees, and you're going to need to think about how you're attracting and retaining those individuals."
Although difficult, measuring the return employers get on their health benefit expenditures is going to be important. Ultimately, those employers that decide to keep offering health benefits will have to start communicating directly with their workers about why the benefit is being offered, what it's worth, why it's important to the business, and what responsibilities the workers will have to shoulder if some sort of health benefit is to be maintained.
- David Guilmette, Towers Perrin
Former President Clinton opted for a less-public, hands-on, more back-room approach to negotiating health reform, while President Obama opted for a more open, hands-off, "sunshine" approach that allowed the public a greater chance to participate in the debate. While Clinton's strategy failed, Obama's approach hasn't been popular either: "Watching how the sausage gets made looks messy to people, and they also feel like they're getting lost in all of the details and that the big picture is not there for them."
- Michael Dimock, a pollster with the Pew Research Center for the People and the Press
In 2009, about 4 percent of the population was enrolled in a consumer-driven plan, up one percentage point from the year before, and enrollment in high-deductible health plans increased from 11 percent to 13 percent over the period. This translates into about 5 million working-age adults in a consumer-driven health plan, and 16.2 million adults with a high-deductible health plan.
- Paul Fronstin, senior research associate at EBRI, who presented results of the 2009 Consumer Engagement and Health Care Survey
"When most Americans think of the rising cost of health care, they're not thinking of the total cost of health care they're thinking about what they pay, and this is what they see. I doubt if most employees have any idea how much their employer is contributing."
- Jon Gabel, National Opinion Research Center, who presented results from the KFF/HRET Annual Employer Health Benefits Survey
With any new large government program, there's a potential for fraud. We're anticipating, just like with the Medicare Part D program, that there's fraudsters out there that's going to be preying on certain segments of the population, particularly seniors but others as well."
- Rebecca Burkholder, National Consumers League
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