United Parcel Service got attention by dropping some working spouses from its health plan and partly blaming the Affordable Care Act. But UPS's move is only one among many changes in employer health insurance, most of them having little to do with the health law.
Employers are raising deductibles, giving workers health savings accounts that look like 401(k) plans, mimicking the health law's online insurance marketplaces and nudging patients to compare prices and shop around for treatments.
Together the moves could eventually affect far more consumers than the law's Medicaid expansion or health exchanges aimed at the uninsured and scheduled to open Oct. 1. Here's a rundown.
Q. The Affordable Care Act required fewer changes in employer coverage than in plans sold directly to consumers. Why are employersoverhauling their benefits?
A. They cite rising costs. Although overall medical expenses are rising at the slowest pace in decades, they're still going up attwice the rate of inflation. Some analysts doubt the deceleration is permanent.
At the same time, employers say health law requirements such as covering dependents to age 26 and banning annual and lifetime limits on benefit payouts also increase their costs. However, some analysts portray what's going on as part a long-term trend of employer benefit redesign that has little to do with the health law.
Q. What are employers doing?
A. There are two themes. In trying to control their own spending, employers often are shifting health costs to employees. So the average annual deductible for an individual -- what consumers pay before insurance kicks in -- nearly doubled in the past seven years, from $584 in 2006 to $1,135 this year, according to the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.) But employers aren't just making workers pay more. They're trying to make them think more about health-related expenses and behavior.
Q. All that will save employers money. Will it keep workers healthy?
A. The law requires insurance to pay for recommended preventive services without cost sharing. Even so, some worry that the increasing number of plans with high deductibles will cause consumers to avoid seeking treatment when they might need it. Many patients don't realize the deductible doesn't apply to preventive care.
Q. If having employees shop for doctors and hospitals makes sense, why not give them more power to shop for health insurance, too?
A. That's the idea behind "private exchanges," so called to distinguish them from the ACA's public exchanges that will sell subsidized coverage directly to individuals starting Oct. 1.
In both cases the consumer gets what's basically a voucher to buy coverage. With the public exchanges it's an instantly spendable tax credit. With private exchanges it's employer dollars. Software guides the consumer through a menu of comparable plans and helps pick the best one for her. Companies steering workers to private exchanges include Darden Restaurants and Sears. IBM and other corporations are putting retirees into private exchanges.
Private and public exchanges are likely to have something else in common: plans with closed, narrow networks of doctors and hospitals
that promise lower costs through discounts and better control of care.
Some see private exchanges and HSAs nudging aside traditional health
insurance much as 401(k) plans replaced traditional pensions. Whereas
employers used to promise health care and retirement income no matter the cost, increasingly they cap contributions for both benefits and let workers bear the risk.