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A Turning Point for Healthcare?

by Tony Chen

Was GM’s announcement yesterday the tipping point for healthcare in America?

From the WSJ: “The labor agreement reached by General Motors Corp. is the most striking example of a bigger trend sweeping U.S. health-care: employers renouncing their decades-old role as chief health-care buyer.”

Everyone knows this is coming, the question is how fast? From the article, we see that now only 60% of firms offer health coverage (down from 69% in 2000). We also see that the average health premium for a family has doubled in 7 years. As more and more Fortune 500 companies unload and/or outsource their employees’ and retirees’ health care, more and more laypeople will be faced with a myriad of complex insurance decisions. Look for a new wave of companies to serve this segment (Steve Case is already after ‘em with Extend Health). Much of this trend is packaged as “consumer-driven healthcare” - i.e. consumers are given a set amount and are the ultimate decision-makers for how to spend it.

So how fast is this coming?

Interestingly enough, even the universal-coverage-minded Democrats aren’t proposing we get away from an employer-based model just yet. Even with Hillarycare 2.0 (which has received some positive reviews), Hillary was quoted with the following:

“We looked at every permutation of how you get to universal health care,” said the Democratic presidential candidate. “There’s great attachment to the employer-based system, even though it is eroding.”

While we’re on the topic, here are a few more opinions from previous posts:
- Ron Wyden (D-OR) believes the time is now to end employer-based healthcare.
- Dr. Richard Fogoros, author of Fixing American Healthcare, believes rationing is the solution (read this post from David Williams)

And check out this great article in the Economist that succinctly compares the Democrats’ health care plan proposals.

My guess is that the 80-20 rule applies to this - we’ll need around 80% of the population to be on individual plans before policies start to follow suit. And given the trends, this is still 10-15 years out.


  Pat wrote @ October 3rd, 2007 at 2:54 am

we’ll need around 80% of the population to be on individual plans before policies start to follow suit. And given the trends, this is still 10-15 years out.

The trouble with individual and family health insurance plans, especially California, is they are medically underwritten so consumers can be denied coverage for pre-existing conditions or even if they are using a presciption drug for acne for instance due to the Rx costs.

  Tom Keesling wrote @ February 19th, 2008 at 12:00 pm

As corporate healthcare benefits have continued to soar, IndUShealth has created a global healthcare solution that can generate immediate hard-dollar savings, and is also easy to implement. Because the first question is typically, “how much can I save?” IndUShealth has created a Global Healthcare Option Calculator that allows corporate benefit managers to obtain estimates of potential savings. See http://www.indushealth.com/corpsavcalc.htm

Offering a Global Healthcare Option to subscribers has also been demonstrated to lower the annual cost increases faced by employers located in certain communities, especially those with fewer competitive local offerings. IndUShealth programs have also begun to result in a reduction in stop-loss insurance claims, thereby reducing premium increases associated with their annual policy renewal. It is estimated that within two to three years of launching their IndUShealth Global Healthcare Option programs, these two forms of additional savings related to access to care in their local communities rival in magnitude to the hard-dollar savings achieved by those plan participants who elect to travel overseas for care.

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