EBRI’s latest report says we’re at the “tipping point” of employer-sponsored health insurance. But it’s not a tipping point for dropping insurance benefits; it’s a tipping point for changing the status quo of how these benefits are delivered.

In The Future of Employment-Based Health Benefits, the Employee Benefits Research Institute asks whether employers have reached the point when they will stop providing health benefits. Data do not show that health benefits are disappearing from the workplace. Nonetheless, some employers believe that the current system of providing benefits is inefficient, lacks transparency, and is “not intelligent.”

Employers concur that the current state of health benefits provision is unsustainable.

Two wild cards that could tip the scale toward employers dropping health benefits are:

1. A major employer dropping health benefits, which would be the first of dominoes falling; and,

2. The erosion or elimination of ERISA’s pre-emption of state insurance regulation, which would also lead to employers dropping support for the voluntary insurance system (see Dr. David Blumenthal’s article in the July 6, 2006 issue of the New England Journal of Medicine for a good explanation of ERISA’s role in the employer-based health insurance system).

What EBRI’s data clearly demonstrate is that employers want to guarantee access, but not coverage. The fact is that workers are paying more for health benefits today than they were in 2000 (for example, there has been an 86% increase in premiums for employee-only coverage between 2000 and 2006 compared to a 17% increase in the consumer price index in the same period).

EBRI found that there has been erosion in the benefits package in that cost-sharing has not kept pace with inflation.

For the immediate “now,” employers are looking for ways to stem health inflation while focusing on improving worker health.

But EBRI anticipates that employers are, “positioning themselves for the health care debate tied to a new presidency in 2009, and the prominence of the issue leading up to the 2008 election.” The Institute analyzed various employer association proposals, and concluded that they have a lot in common — universally proposing moves from the status quo. So the tipping point in question isn’t the actual willingness to provide health insurance access — but in the “how” that employers go forward in doing so.

Health Populi’s Hot Points: There is virtual unanimity among employers looking forward to a new generation of worker health benefits where the individual worker will have much greater accountability and responsibility. Words employers used to describe employee-individuals in EBRI’s discussions were “disengaged,” and having “entitlement mentalities.” As we get closer to the 2008 elections, look for the employer groups to lobby for proposals where individuals (workers) take on more clinical- and account-management responsibilities for their own health. The plans that employers are proposing would involve an account where employers would provide a certain amount of funding, but employees will be responsible for making decisions on how to allocate that fund stream. The implication is that a whole lot more useful information had better be promulgated in the health marketplace or we’ll wind up with well-intentioned health insurance access and even lower take-up rates among consumers.

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