Catalyst for Payment Reform is a new organization set up by several large employers. The organization’s goal is to pay for health care differently, and make sure that those employers run ahead of any Medicare payment reform coming down the track. Suzanne Delbanco, formerly of Leapfrrog, is now the first Executive Director and Founder of the new organization. Last week I interviewed her about what the organization is going to do, what employers care about, and (despite decades of employers being simple price takers in health care) why this time it’s going to be different.
Keep watching to the very end to see the great view from Suzanne’s office!
The stunning election results will put even more pressure on Congress to deal with the economy and jobs when it reconvenes in mid-November. But as it turns out, one way to boost the economy is to reconsider the health reform bill.
Most people intuitively know that the worst thing government can do in the middle of the deepest recession in 70 years is enact policies that increase the expected cost of labor. Yet that is exactly what happened last spring, with the passage of the Affordable Care Act (ACA).
How bad is it? As I explained at my own blog the other day, right now we’re estimating the cost of the minimum benefit package that everyone will be required to have at $4,750for individuals and $12,250 for families. That translates into a minimum health benefit of $2.28 an hour for full time workers (individual coverage) and $5.89 an hour (family coverage) for fulltime employees.
Granted, the law does not specify how much of the premium must be paid by the employer versus the employee — other than a government requirement that the employee’s share cannot exceed 9.5% of family income for low- and moderate-income workers and an industry rule of thumb that employers must pick up at least 50% of the tab. But the economic effects are the same, regardless of who writes the checks.
In four years’ time, the minimum cost of labor will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331a year. (I think you can see already that no one is going to want to hire low-wage workers with families.)Continue reading…
As employees participate in open enrollment for their company’s health insurance enrollment next year, it’s clear they should make a point of participating in their employer’s enrollment information meetings, not merely pick last year’s coverage. Partly because of the implementation of President Obama’s health care overhaul plan, U.S. workers are expected to pay average premiums of $2,200 in 2011 – an increase of 12.5 percent, the biggest in four years, according to human resources consulting firm Hewitt Associates.
Increases in health care premiums are certain to continue increasing in coming years at double-digit rates, with inflation further exacerbated by the entry of 32 million uninsured Americans into the healthcare system. This will speed the transformation of insurers from underwriters of medical risk to managers of medical risk, a process inevitably accompanied by higher prices.
Annual healthcare inflation — and hence baseline premiums — have been rising 8-12 percent annually for two decades, and there is no reason to expect this to change anytime soon. It could actually increase as provisions of healthcare reform – such as the mandated removal of pre-existing conditions – become law. Some of these provisions, such as the elimination of a dollar amount of health benefits in a given year and the fact that children can now stay on a parent’s health plan until age 26, help explain the likely spike in health insurance premiums next year.
Until now, non-health care business has been noticeably absent from the health care reform proceedings , and quiet about the bills’ impacts on their management of employee benefits, on cost, and on the larger issues of global competitiveness. Where have the voices been of the powerful business leaders who will pick up much of the tab?
They’ve finally surfaced, and now we’ll see whether they have the will to bring reform back on track. They certainly have the strength. The question is whether this salvo by the business mainstream could force Democrats to reconsider and revise the content and structure of their proposals.
On October 29th, a powerful collaborative of major employer organizations sent a letter to Speaker Pelosi and Republican Leader Boehner asserting that the House legislation “falls short of the bipartisan goal of controlling costs and jeopardizes employer-sponsored coverage which now serves more than 160 million Americans.” The same group sent a similar letter to Senate President Reid earlier that week.