Employees accustomed to choosing from among two or three health-insurance plans are beginning to see a much broader menu of choices – and some benefit experts predict that trend will continue and grow in the next few years. Increasingly, health-benefit choices entail much more than different premiums, co-payments and provider networks. Some workers are being given more than 10 options and weighing whether they want more of their benefits in the form of life or disability insurance.
In addition, consumers have more information readily available about healthcare providers, which also is expanding their options for choosing doctors. That growing role of consumer choice in healthcare was the focus of a recent New Jersey Health Care Quality Institute conference in Ewing.
A key component in increased choice is the growth of private health insurance exchanges, which are similar to the new federal insurance marketplace, or exchange. In the private exchanges, the employer contracts with an insurer, broker or consultant that offers a series of insurance options from one or more insurance carriers .
And these exchanges can include choices that go beyond health insurance.
For example, New York-based Liazon contracts with employers who pay a fixed amount of benefits per employee. Employees then choose the form these benefits will take, including the amount devoted to health, dental and vision insurance, as well as to life or disability insurance.
Liazon co-founder and Chief Strategic Officer Alan Cohen said at the conference on Tuesday that it no longer makes sense for human resources or finance officers to decide what insurance their workers will receive, when exchanges allow consumers to make these choices for themselves. He added that most consumers want less health insurance than they’re currently given.
“When companies are purchasers of insurance, they’re typically overbuying health insurance and under-buying” disability insurance and other benefits, compared to what their employees would choose, Cohen said.
Since the number of choices can become very large, Liazon offers a questionnaire that helps consumers decide what form their benefits will take.
The growth of private insurance exchanges drew concern from audience member Dudley Burdge, a staff representative for the Communications Workers of America Local 1032, who said he believes that consumer choice will be used as an excuse to shift the cost of health insurance to workers. He compared it to the shift in retirement benefits from pensions in which employers guaranteed the benefits to savings plans in which employers contributed a fixed amount.
“For people with serious problems, that shopping thing doesn’t work,” Burdge said after the conference.
Christopher Condeluci, an attorney with the law firm Venable LLP in Washington, D.C., pointed out during a panel discussion that the shift of healthcare costs toward consumers has been occurring for decades, well before there were private exchanges.
Condeluci served as a Republican staff member on the Senate Finance Committee, which wrote much of the Affordable Care Act.
He said private exchanges can run into a technical problem when they offer insurance from more than one insurer, since healthier consumers may gravitate toward cheaper plans offered by a single insurer, forcing other companies to bear too much risk. These problems are alleviated in exchanges that offer options from only one insurer, since the healthier members’ premiums offset the costs of less-healthy members.