The Future of Group Health Care: Evaluating the New Choices
There’s no question that the health care landscape has altered significantly in recent years, and those changes have created a mounting set of pressures for employers.
Year after year, employers face tremendous upward cost volatility, and the numbers are skyrocketing. In 2012, the average cost of health coverage surpassed $10,000 per employee, and those costs are expected to grow nearly three times faster than the average salary. Combined with the implementation of health care reform, the challenges facing companies are reaching critical mass.
Many employers have tried to respond by continuing to self-insure and address each cost hike by either paying more, sharing costs with employees, reducing plan coverage or changing insurance carriers. But as the status quo becomes less sustainable, employers are quickly rethinking how they offer health care benefits. And they can essentially choose from two paths of action:
- Manage risk by shifting more cost and accountability to participants.
Many companies are changing the rules by offering self-insured group coverage that transfers more responsibility to employees. This usually means requiring or incentivizing health improvement activities, like lowering blood pressure or losing weight. It can also mean offering plans with higher deductibles that increase accountability among employees for their own health. These types of plans can encourage people to use the health care system more effectively and wisely. And this strategy does work, by slowing the health care demand that flows into a broken system. However, it may not be right for some companies, depending on their culture and workforce. And this method only guides employee behavior. It doesn’t transform the core problem: rising prices that stem from a system lacking competition and the efficiencies of a free market.
- Transfer risk by evolving to an exchange that leverages competition.
As the first national, multi-carrier private health exchange for large corporations, the Aon Hewitt Corporate Health Exchange is changing the playing field. An innovative marketplace where employees can choose between fully insured group plans from online casino multiple insurance companies, the Corporate Health Exchange offers a leap forward for all participants.For employers, the Aon Hewitt Corporate Health Exchange creates unprecedented cost predictability and transfers risk and administrative burden. And because multiple insurance carriers offer plans side by side to every employee, this new kind of group-health marketplace is driven, for the first time ever, by competition and its resulting efficiencies.
For employees, the new marketplace brings more choices in plans and carriers, as well as a new ability to choose the insurance that best fits their needs. And carriers themselves also stand to benefit from entry into new markets at an efficient cost.
In other words, the Aon Hewitt Corporate Health Exchange creates a new marketplace that’s truly sustainable—a marketplace that gives employers a better way to offer health benefits in the new health care environment.
To talk to our sales team about whether the Exchange is right for your company, please contact us at firstname.lastname@example.org.
Ken Sperling is Aon Hewitt’s national health exchange strategy leader.