As the wrangling over the future of the Affordable Care Act continues, it is important for consumers to keep their eyes on a very important issue – an issue that remains important, regardless of the outcome of the political battles. The issue: the increasing burden on individuals in making health care purchasing and utilization decisions.
Health Care is Complicated
In mid- and large-size employers, it is not uncommon for employees to have a range of different types of health insurance coverage to choose from (including Health Maintenance Organizations, Preferred Provider Organizations, Point of Service plans, Exclusive Provider Organizations and High Deductible Health Plans). Each different type of plan takes a different approach to the use of hospital and/or physician networks – with a range of penalties for not following the plan coverage rules.
And, even within a type of health care plan, insurance companies define covered networks very differently, with some policies covering a “broad” network of providers in an area (typically over 70%), other policies covering a “narrow” or “skinny” network (somewhere between 30% and 70% of providers in an area) and other policies offering full coverage only if you use providers in an “ultra-narrow” network. Oh, and you may have to choose from among similar products, but from different insurance companies with different networks.
And That’s Just the Start
Selecting the type of plan is just the start; consumers must also:
• Select from a large range of plan deductibles, trading off whether to spend on monthly premiums or accept more risk in out-of-pocket costs.
• Decide whether to use a Health Savings Account (HSA) or (if available) an employer-sponsored Health Reimbursement Arrangement. And, although HSA and HRA sound alike, they have very different rules and restrictions.
• Make some difficult decisions on where and when to get treatment – does that weekend injury or illness require an immediate trip to the emergency room, a visit the next morning to an urgent care clinic, or does it wait until your primary care physician can see you?
Each of these decisions can affect your health and your finances.
And It Is Only Going to Get More Complicated
Increases in health care costs may have tapered somewhat over the past few years – but are still going to exceed wage growth. Neither insurance companies nor employers want to bear that cost, so they often deal with the problem by shifting costs to employees in different ways (employers) or limiting access to care or providers (insurance companies).
This means that individuals will bear an increasing economic – and decision-making – responsibility for their health care purchases. This will be true regardless of whether Obamacare remains in place or some version of TrumpRyanCare is enacted.
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Healthcare Wars: Employers Caught in the Middle
As the political battles – and stalemate – over the Affordable Care Act continues, employers may find themselves with the worst of all worlds. The portions of the ACA that create the greatest burdens on employers, such as the mandates, taxes and administrative obligations under the ACA stay in place. At the same time, uncertainty in the individual markets creates blowback that hurts employers in a number of ways.