Jury Still Out On ACA

Sept. 29--The expert speakers at Thursday morning's Healthcare Forecast Breakfast differed on whether the Affordable Care Act will achieve its long-range goal of reining in costs.

But they agreed on this: The ACA has added a lot of complexity.

Indeed, insurance executive Dan Tropeano called that the No. 1 challenge presented by the law.

"For small employers ... it's made things much more complicated," he said in response to an audience question. "It's done the same to us as insurers."

Much of that complication has to do with the internal workings of the industry.

Insurers, health care providers and employers who offer health coverage all are forging new relationships with each other.

Payment schemes are changing dramatically as those paying the bills seek to get more bang for their buck.

The lives of ordinary health care consumers look likely to get more complicated, too.

That's because, as the market changes, companies will shift more choices to their employees.

They'll also continue shifting costs, as they've been doing for years.

Both trends are evident in the Lancaster County Business Group on Health's annual health benefits and policies survey, released during Thursday's breakfast.

The business group organizes the event, now in its 15th year.

Sixty-two employers responded to the survey, representing organizations with more than 20,000 employees.

More than 40 percent of respondents said they're considering implementing a "defined contribution" health insurance model.

That is, instead of providing employees a defined benefit - access to a health insurance plan - companies will provide a fixed amount of money and have employees shop for insurance on their own.

The ACA requires companies with more than 50 employees to offer health insurance or pay a penalty, beginning next year.

Those with fewer, however, are exempt.

Those smaller companies account for about one-quarter of the business group's survey respondents.

More than 20 percent of respondents said they're considering moving employees to Pennsylvania's public exchange.

As many people know, the ACA set up public "exchanges," or marketplaces, in each state. Consumers can select from plans with different coverage levels, deductibles and co-pays.

The exchanges are designed for individuals, not for people who get insurance through their workplace.

So far, there hasn't been "large-scale dumping" of people onto public exchanges, said Dan Tropeano, executive director of insurer UnitedHealthcare of Pennsylvania and Delaware.

"Maybe that will pick up," he said - especially among smaller companies - "but we haven't seen it yet."

One-third of the business group's survey respondents said they're considering having employees buy through a private exchange.

Those are marketplaces set up by insurers or their representatives.

Private exchanges can be set up by a single carrier, and offer just its products, or by brokers and consultants offering products from multiple carriers.

Exchanges help companies offer choices, but an exchange as such doesn't help control costs, Tropeano said.

A lot of companies hope to achieve cost savings through employee wellness programs: weight management, smoking cessation and so on.

Companies have all sorts of choices regarding the features of their health plans, Tropeano said. However, for cost-control measures to work, the incentives have to be clear, he said.

People need to understand what they're buying.

The problem with choice is complexity, said Michael Taylor, senior vice president of AON Hewitt, a consulting and benefits administration firm.

Giving people more options can overwhelm them, he said.

The U.S. spends huge amounts of money on health care: more than 17 percent of GDP, compared with 9 percent to 11 percent or so for other developed nations.

Yet employers, insurers and health care providers all feel shortchanged, said LCBGH executive director Jim Schmucker, who emceed Thursday's event.

"Where's the money going?" he asked Taylor.

There's no single villain, Taylor answered. All the players are spending money inefficiently one way or another, he said.

That said, he suggested providers - hospitals and doctors - may have to start adjusting their expectations downward.

Historically, reimbursements have been pretty generous, funding gorgeous buildings and extensive duplication of services.

"We're just not going to pay that anymore," he said.

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