September 6, 2013 by Tony Novak
Recently I’ve focused some of my comments on the three dominant trends in employer-provided health plans and what this means to our financial future:
1. The focus is shifted from providing insurance to making employees healthier. Whether this change of focus is a good thing is still an open question. For the first time ever, some unhealthy employees who fail to meet their employer’s goals for improving health will pay more for their benefits through salary deductions in 2014 than their healthier co-workers.
2. Increased out-of-pocket expenses. The new group insurance plans starting in 2014 exclude a larger portion of the total medical bills. This may come as a surprise to employees since much of the media coverage has focused on the expanded coverage aspects of the Affordable Care Act. Increased policy deductibles and co-insurance will be a shock to some employees. Supplemental plans like Health Savings Accounts, Health Reimbursement Arrangements and Flexible Spending Accounts become more important.
3. Employer-provided health coverage continues to decline. For the first time ever, less than 1 in 2 Americans are covered by employer-provided health plans in 2013. The decline is expected to continue and the increased cost associated with the Affordable Care Act is blamed for accelerating the decline. The criticism seems justified: many of the nation’s largest employers have already confirmed plans to use more part-time workers without employer-provided health benefits.
It seems that all three trends are pointing to increased roles for individuals and government. Many believe that these trends point to the eventual inevitability of a single-payer government health care system supplemented by individual financial actions by those who can afford more than basic health coverage.