Benefits Brokers Need To Evolve To Survive, Expert Says

A health care expert predicts 2019 will be marked by a backlash against high deductibles as consumers fear accessing health care because of rising out-of-pocket costs.

Dave Chase is co-founder of Health Rosetta, which certifies benefits advisors to help their employer clients save money on employee benefits by improving the plans they offer their workers. He also is author of The CEO’s Guide To Restoring The American Dream.

High-deductible health plans are going the way of corporate wellness programs and disease management programs – consumers don’t like them and are pushing back against them, Chase said.

One reason, he said, is a blame-the-victim thinking in these plans. “We keep hearing people say, ‘We’ve got to give everyone skin in the game.’ But the reality is there are very few tools to be an effective consumer as a patient.”

Part of the backlash against high deductibles, Chase said, is “20 years’ worth of wage stagnation and decline.”

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Sixty percent of the American workforce earns $20 an hour or less, according to the U.S. Bureau of Labor Statistics. With various studies showing more than half of U.S. households reporting they have less than $1,000 in savings and the national average health insurance deductible at $1,400, “you’re basically a bad stubbed toe away from financial ruin,” Chase said.

Even if they have insurance coverage, people are afraid to access the health care system because they are afraid of the cost, he contended.

Benefits brokers are evolving much like stockbrokers did 20 or 30 years ago, Chase said.

“The smart stockbrokers reinvented themselves as financial and wealth advisors where they have more aligned interests and more disclosure,” he said. “The challenge with benefits brokers is that these individuals are meant to be representing the buyer but they’re paid essentially as a seller’s agent.”

The best way to slash health care costs is to improve benefits, Chase contended. “So you can put into place plans that basically boils down to “good decisions – free; bad decisions – expensive.”

High-deductible plans have led to more people going the self-pay route in funding care, Chase said. He also predicted a move away from preferred provider organizations toward something called a transparent open network.

A transparent open network offers purchasers such as employers fully transparent pricing for medical services and procedures ranging from specific treatments (e.g., knee replacement or colonoscopies) to specific conditions (e.g., diabetes or kidney disease), according to Health Rosetta’s website.

Services and procedures are typically bundled, meaning there is just one bill for all the services received for a specific treatment or condition that includes multiple providers and sometimes multiple settings. Another dimension of transparency is that the market is open to participation by any provider with sufficiently high-quality indicators and charges fair prices.

A transparent open network offers employers an alternative to traditional fee-for-service payment models, in which individual services are listed on itemized billing statements from multiple sources.

“As benefits brokers put together these plans, they have new tools that deliver much more value than the PPO networks,” Chase said.

Chase’s advice to benefits brokers in 2019?

“If you want health care to cost less, you gotta pay less. We don’t use health care at any different levels than any other country. We just pay more. We don’t have to.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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