The role of brokers in the new world of health care in 2014 is changing, and while it’s tough, there are five key marching orders for making the most of it. This sentiment opened the Workplace Benefits Renaissance in Atlantic City, N.J. on Monday with a keynote from Andrew Webber, the president and CEO of the National Business Coalition on Health based in Washington, D.C. In reference to the brokers’ role in state exchanges he said there’s a role, “but fundamentally it’s changing when it comes to the state exchange program and that was by design, as I understand it.”
Webber was met by several frustrated attendees’ questions at the end of his talk, which was peppered with optimism about the Patient Protection and Affordable Care Act moving forward. One audience member called it a “giant entitlement program with a billion-dollar” price tag. But Webber’s overall message spoke to general optimism about the future, noting that “we shall see,” about a lot of the realities for brokers and agents in 2014 and beyond.
Meanwhile, Webber laid out five ways that the employer community can think about PPACA moving forward:
- Politics aside, there’s a cost issue: “Every Democratic president since Truman has tried to get major health care reform through Congress, and finally, politically, that job has been done, we have the PPACA,” Webber said. He notes that regardless of one’s politics, the Supreme Court decision last summer and the re-election of President Barack Obama have decided that PPACA is here to stay. “Now we have to think,” he said, “’how are we going to make this delivery system possible?’ Now the conversation can finally turn toward cost containment.” He notes that the average household is spending 18%, upwards of 20%, on health care, based on recent data, and thus, “I for one am glad that all eyes are now on cost containment and not on expansion. We’ve needed this,” he said. “We have a broken and wasteful system and people are angry, this is where we need to be, fixing cost is next.”
- Eye on the prize: Webber notes that the distraction of PPACA and the politics that have surrounded its potential repeal, but eventual acceptance, have been understandably distracting, but now is the time to refocus on the goals for clients. They are: 1) improving workforce health and productivity and 2) getting that health care at the best value possible.
- The golden age is over: “Let’s not kid ourselves,” Webber said. “ERISA and the wonderful framework of flexibility it created is over.” He continued: “It’s been almost a gift to employers for the last 20 years, but with health reform, those days are over.” Webber said that PPACA is a whole new set of granular regulations, especially impacting the employer community and keeping the legal one in business. He emphasized that it’s important to understand that the flexibility of ERISA is no longer, the law of the land is now nuanced. Brokers need to embrace it to move on.
- Every employer is different: Webber noted that he’s heard from employers that they’re rethinking “whether or not they’re in this business [of health insurance] at all.” Most employers have the mentality that all strategic options are “on the table now” and that what is right for one might not be for the other. For a few examples, he said, small employers are different than large, and lower wage employers are different that high-tech, knowledge-industry workforces. The popularity of health benefits needs to be considered by each individual company, in addition to their location, competition, overall culture and more. Some smaller employers may at least check out the state and federal exchanges, while other large but low-wage employers like retail giants may venture to private exchanges. The key is to think strategically, Webber said, and tailor that strategy.
- Message is to the provider: This is broad, but simple, Webber said: “The message of health care reform is to the provider, that the incentives and payment structure are changing.” He noted that this will not happen overnight, but slowly over the next 10 years and providers need to brace for this, and brokers need to reinforce this message that things are going to change. Costs will soon reflect back on the provider, in a world where the provider was never at risk before. This way, employers will have more incentive to coach employees on costs, if their costs are more impacted.
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