Big Changes for Health Plans
By Kathy M. Kristof
Los Angeles Times
October 9, 2005
Every year, workers are advised to look closely at their benefits package during open enrollment season. This year, they have even more reasons to read the fine print.
Companies are increasingly requiring “active enrollment” – meaning that if employees don’t check the right boxes, they could end up without health insurance, or find themselves enrolled in a “default” plan.
“More and more companies won’t allow passive enrollment, which is when they don’t hear from you, they give you what you had last year,” said Tom Billet, senior consultant with benefits firm Watson Wyatt Worldwide. “Companies are increasingly demanding active enrollment.”
One reason is that benefit choices are changing significantly this year. That’s partly because laws have changed to allow new options such as health savings accounts. It’s also because employers are experimenting with ways to cut costs, which have more than doubled in the last eight years, according to benefit consulting firm Hewitt Associates.
“We are seeing increased deductibles, but also more of a consumer-oriented focus to healthcare,” said Sarah Taylor, annual enrollment leader at Hewitt. “There are a lot of plans that weren’t offered in the past – like health savings accounts and build-your-own plans.”
“You mix and match, and your premium would be based on the things that you choose,” (Taylor) said. “It’s really up to the employee to figure the benefits that have the most value to them.”
“It’s the rare plan today that has no change from year to year,” Billet said. “So making the same election that you made last year may not be the best decision. It’s a really good idea to evaluate the situation with a fresh eye.”
http://www.latimes.com/business/la-fi-perfin9oct09,1,6806534.column?coll=la-headlines-business
Comment: The lesson? The mainstay of private health care coverage, employer-sponsored plans, no longer provides the security of affordable, comprehensive benefits. Rather than deciding for their employees how much insecurity is acceptable, employers are shifting this difficult decision onto their employees.
The conflict is obvious. The employers’ concern is the affordability of health insurance; the employees’ concern is the affordability of health care. As long as health plans are sponsored by employers, there will be a continual effort to drive down insurance costs in the face of escalating health care costs. The burden of the increased health care costs are then shifted to the employees. This dynamic creates instability for our prevalent mechanism of funding health care: employer-sponsored plans.
Although a universal public insurance system would be under continual attack by libertarians, it would be vastly more stable than our current fragmented system of funding health care. Even libertarians don’t want their Medicare messed with.