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December 07, 2009

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Greg Dagley

I agree that what GE has done here is pretty bleeding edge, but I don't see this as "the nuclear option." I think we'll see the nuclear option play out after health reform legislation is enacted in the form of some large employer's complete elimination of health benefits altogether. The legislation currently being debated is likely to substantially increase costs to employers and make benefits administration onerous, and the penalties for not providing coverage are so insubstantial that many employers will decide to get out of the business of providing health benefits altogether and simply pay the applicable fees.

I suspect it'll be a large retailer who moves first on this, given the number of low wage employees they require to run their businesses. Though I’m sure they would love to move first on this, it won’t be Wal-Mart due to the public relations mess it would create for them. Keep your eye on other bargain focused retailers (K-Mart, Target, Costco, etc.) and/or grocery chains, though.

The cost increases that will likely result from the proposed legislation will ultimately lead to a simple business decision: continue to cover the rising cost of health insurance for employees without much opportunity to help curb those costs or pay a nominal fee so that they can purchase insurance elsewhere. It doesn’t take an MBA to come to a logical conclusion.

DSWilson

Hello - this is not a new thing! Welcome to the real world that many of us are already in, and have been for several years. Try a family deductible of $5K - and then a 10% copay afterwards. Yeah, it's equivelant to a paycut, however there isn't much in the way of options except moving to another company, and even then they don't tell you up-front, but after you start the job... The irony is that although it saves the company money upfront, how many people will post-pone check-ups, and preventative care due to the high out-of-pocket costs. Then they discover something major, which costs more money to treat, for everyone, rather than the lower preventive costs, which might have stopped or limited the more costly outcomes? (i.e. Diabetes, High Blood Pressure, Cancer, etc.)
Sure HSA accounts are a nice concept, but you have to have money to put into the account, upfront! How many families, have an extra $5K sitting around to put into the account, to cover their deductible costs - not many...

Judi Braswell

As the director of EAP for a behavioral managed care organization, I have experienced first hand over the past twenty years that most Americans are not prepared or equipped to navigate the health care arena, which can be confusing and intimidating. For cost savings, as well as better outcomes, barriers to appropriate care, including financial, lack of knowledge, and apathy, must be removed. Controlling health care cost and producing better outcomes requires lots of education and guidance. I think high deductible plans have shown that health care is simply under utilized, resulting in higher long-term cost due to illnesses being identified in later stagies.
An effective EAP can provide the education and assistance to enable the consumer to make good decisions. A PPO allows freedom of choice and negotiated rates. Organizations can further enhance their benefits and contain cost by integrating an EAP and behavioral managed care carve out, all on a fee-for-service, or pay for services rendered basis.

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