By Jody Bright
Employers have long resented that somebody way back in the day said “you’re going to provide health care to your employees”. Well, that’s not exactly how it went but that’s the point to which we have evolved.
From hospitalization plans that only covered inpatient services to the tune of “$12/day for a semi-private room”, that was reimbursed to the insured and he paid the hospital (no coverage for physician services), to plans that cover absolutely everything, every possible service and specialty drug, many things they should not, thereby creating space for a long legacy of abuse.
In all this mounting cost and confusion insurance agents saw great opportunities to cloak themselves in the cape of the super hero, Consultant. Selling the idea over decades that costs can be curtailed through inordinate complexities of analysis of every possible variable and supposed “strategies” brought by the Consultant. To the end we now see frequently, after a $100k consulting fee, to deliver the findings of:
1) Hospital services and pharmaceutical expenses are out of control
2) You need more money
These caped heroes have only been relegated, along with the rest of us, to just watching the costs go up faster than anyone’s income. And some of us question the foundational loyalties of such as to whether it be with the client or the legacy health plan community, without which they would have nothing to analyze or on which to offer consultative value.
You see consultants commonly have two primary motives:
1) to keep that client coming back
2) to keep the client bought into the previously mentioned convention of even being in the insurance business
Without the second they cannot accomplish the first.
This brings us to ask about the future.
One of the biggest initiatives to come along is the Marketplace, aka the Exchange, where individuals are assured access to health plans, for individual purchase, that equal, by government mandate, the best group plans offered. At reasonable prices and with the potential of advanced premium tax credits (APTCs) that further assure affordability to the vast majority, millions of Americans are finding solutions.
In addition to this, Congress passed laws creating the Individual Coverage Health Reimbursement Arrangement (ICHRA), which provides a vehicle for employers to fund access to these Marketplace plans on a group benefit, tax-advantaged basis. Legislation has subsequently enhanced the features of the ICHRA, making it better and better for employers, employees, and families.
In all of this, where do health plan consultants fit into the ICHRA?
THEY DON’T. (but they sure won’t tell you that.)
The employer, who has heard employees repeat for years “just give me the money and I’ll buy my own”, and who has wished he could do just that, now absolutely can.
When an employer establishes an ICHRA he budgets the funds he wishes to make available, and the control over which insurance carrier, which of many, many different plans to choose from, is placed in the hands of the employee.
Now the employee may choose from plans prioritizing his provider(s), hospital, or specific prescription even! Or he may simply choose the least expensive option among a number of possibilities.
There is no place for “analysis” or consulting over cost or benefits as everything the Marketplace offers is at the fingertips of the individual. Health care consulting and consultants are obsolete in this environment. …unless that consultant can figure out how to charge the individual for his services in “analyzing” his plan (tic).
The employer, through the ICHRA, is out of the insurance business! The value of consultative analysis evaporates as there is nothing to “analyze”.
In addition to this employees will find greater resources in potential Advanced Premium Tax Credits towards covering their dependents, unequaled in the legacy group medical plans.
As John David Souther wrote, “b-b-b-bye, bye baby, rock yourself to sleep!”
