Study: Large Employers Want Health Insurance Flexibility, Transparency

Published July 14, 2017

Large employers want more competitive health care and insurance markets than are possible under the Affordable Care Act, researchers at the American Health Policy Institute (AHPI) have found.

Seventy-nine percent of the employers AHPI surveyed say they should have the flexibility to design their own health care programs and “should be free from material financial, regulatory, or administrative incentives or disincentives that favor one type of healthcare approach over another,” states the May 2017 report, “Changing Attitudes Among Large Employers Towards Health Care Delivery: A 2017 Snapshot.”

Ninety-two percent of companies favor mandates requiring “complete and transparent access to health care cost quality and data to create a competitive marketplace,” the report states.

AHPI surveyed almost 400 companies providing health care benefits to more than 20 million Americans, according to a May 17 AHPI press release.

Mixed Reviews

Jeffrey McGuiness, CEO emeritus of the HR Policy Association, says employers have expressed interest in having employees buy health insurance in the individual marketplace.

“The strong majority of employers appear to be open to moving in new directions, and one that appears to be particularly attractive is shifting health care to the individual market,” McGuiness said.

Jay Kempton, president and CEO of the Kempton Group, a third-party administrator assisting employers who provide health insurance benefits to employees, says employers are unlikely to shift employees to the individual market.

“I do not see large employers—multiple hundred or multiple thousand—going to the individual market,” Kempton said. “That seems almost nonsensical.”

Self-insurance gives companies the flexibility to craft plans satisfying to their employees while reducing expenditures on outside insurers, Kempton says.

“[With] self-insurance … they would have more options available to them as far as the design of the plan, what networks they will choose, what deductibles, coinsurance, and benefit levels,” Kempton said. “They simply have more options for their employees and are more able to provide a custom solution for their employee base.”

ACA ‘Eliminated Competition’

Current insurance markets serve employers, and thus employees, poorly under ACA, Kempton says.

“Anybody moving to an individual Obamacare-style plan—that is the antithesis of a market, competition, and innovation,” Kempton said. “Those employees … may have gone from 10 different carriers competing for their individual market business to maybe one or two carriers. The ACA has pretty much eliminated competition in the individual market.”

Crisis-riddled health insurance markets could attract innovators willing to fix problems caused by Obamacare, Kempton says.

“People are more willing to think outside the box and look at … nontraditional solutions to provide health care to themselves and their family members,” Kempton said. “If we get some smart entrepreneurs coming into some of the monopolized areas of the country and undercut the competition, that’s what needs to happen.”

Small Business Bust

McGuiness says Obamacare has made it harder for all employers to provide employees with high-quality, cost-effective insurance plans.

“As long as health care policy and the health care marketplace in the United States are unstable, those spending large amounts of resources to provide benefits will continue to seek ways of doing so that minimize risk and promote quality care for their beneficiaries,” McGuiness said. “We have seen evidence of that for more than two decades, and the current environment appears to have exacerbated the situation.”

Kempton says insurance markets for small businesses lacking the financial means to self-insure will deteriorate under ACA.

“If they are not able to self-insure, it is going to get worse for the small employer,” Kempton said. “They will have less choices and costs will continue to go up, because they don’t really have any control.”

Emma Vinton ([email protected]) writes from Troy, Michigan.

Internet Info:

Matthew J. Bolduc, “AHCA Would Reduce Premiums by 20 Percent, CBO Estimates,” Health Care News, The Heartland Institute, July 2017:

Matthew J. Bolduc, “Humana Withdraws from Obamacare Replacement Effort,” Health Care News, May 18, 2017:

Jeffrey C. McGuiness, “Changing Attitudes Among Large Employers Towards Health Care Delivery: A 2017 Snapshot,” American Health Policy Institute, May 2017:

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