Now in its third year of implementation, the Affordable Care Act (ACA) continues to evolve. Even as healthcare costs nationwide have fallen overall in recent years, and nearly 10 million individuals have purchased health insurance through the ACA as of last June (with another 1.1 million signing up during this fall’s open-enrollment period), the ACA is not without its challenges.
The looming, so-called “Cadillac” tax on higher-end plans starting in 2018 is causing many employers to regroup and rethink the healthcare expenses they can pass on to employees. And, most recently, the announcement by UnitedHealth Group--the nation’s largest health-insurance carrier--that it may pull out of the health exchanges implemented by the ACA starting in 2017 has sent shock waves through the industry.
A recent article in Fortune counseled that, regardless of what UnitedHealth decides, employers often change up their insurance offerings during open enrollment. Like it or not, employees may want to keep a song lyric from decades ago in mind for next year: “You better shop around.”
An Abrupt About-Face
A second write-up about UnitedHealth’s change of heart in the Boston Globe, announced in November, followed closely on the heels of the insurance giant’s stated intention in October to expand its participation in ACA exchanges to 11 additional states next year.
The carrier indicates it expects to lose some $350 million on its ACA plans this year, and possibly up to $500 million in 2016. Both supporters and detractors of the ACA alike have always acknowledged that the program’s success depends on enough healthy individuals signing up for coverage to help defray the costs of sicker members. UnitedHealth’s projected losses (including a lower earnings forecast for 2015) echo similar concerns from fellow insurer giants Anthem and Aetna, though both have yet to announce any intentions to pull out of the ACA networks.
UnitedHealth also appears concerned over the number of members who purchase insurance in order to obtain medical treatment, then drop their coverage after they’ve received the care they need. Then, too, the Fortune article offers some additional sobering statistics about the ACA: some 50 health carriers are leaving the ACA exchanges this year, citing higher-than-expected costs and lower-than-anticipated claims reimbursement.
In 2016, those looking for coverage will find 6% fewer insurance companies offering it, and a 10% drop in plans overall. Some carriers have even been forced to shut down in 2015 due to their precarious financial states, already leaving many holders of ACA coverage in the lurch.
The new coverage consumers find available will likely be more expensive than the ACA-sponsored insurance they’ve had, with many in the so-called “silver” category of middle-tier, more affordable plans not even available in 2016.
Part of a Changing Benefits Landscape
While it came as something of a surprise, UnitedHealth Group’s news about possible changes to its ACA participation are not out-of-sync with other likely modifications to employer health benefits in 2016, as a recent Fiscal Timesarticle pointed out. Among the article’s predicted trends for the New Year:
Employers, generally speaking, will absorb some healthcare costs and pass on others to their employees, in an effort to control rising expenses.
Higher health-insurance premiums (up 5% in 2015) and narrower offerings of doctors and medical providers to whom companies and insurers offer preferred rates.
Preventative and wellness programs, popular among corporate benefits for the past 10 years or so, will reflect greater offerings, though with more demonstrable results and metrics required; some companies are providing their employees with tracking devices like fitbits to measure their activity, and are starting to offer successful participants an expanded roster of health plans.
Telemedicine services offered on-demand, Uber-style: In addition to offering on-site clinics for minor health afflictions requiring minimal treatment, employers are experimenting with offering insured employees and their families access to doctors via phone calls or video messaging; such options are thought to be less expensive and time-consuming than visits to urgent-care centers.
The Fiscal Timespiece also discusses other projected changes to the 2016 benefits landscape, including continued expansion of corporate 401(k) offerings, more generous parental-leave policies; and personal-finance assistance for employees planning for their retirement (thank you, Baby Boomers), wanting to purchase a house – and even paying off their student loans (much obliged, Millennials).