PricewaterhouseCooper’s Health Research Institute (HRI) conducted a survey released this year that compares Affordable Care Act (ACA) exchange rates to the employer-based market. This graphic reveals that the average employer-based plan falls between the gold (80% of healthcare costs covered by the plan) and platinum (90%) levels created under the 2010 law.
Your customers purchase supplemental protection products to make their trips enjoyable and stress free. But can your business get that same “complete protection” piece of mind from the Affordable Care Act (aka Obamacare)?
Important financial, political, constitutional, regulatory and taxation issues exist.
But in this article, let’s focus on those changes that will make a positive impact on your bottom line — specifically, changes that have taken place in the individual health insurance market that will provide a major competitive advantage to those business owners willing to do something different.
In this article, there are references to two types of health insurance:
- Group health is an employer-sponsored health insurance plan that is typically one carrier, one plan and one network. The employer picks the plan, pays the bills and decides how much to deduct from employees who wish to participate.
- Individual health is health insurance that covers individuals, their children and spouse or partner. It is purchased via the Health Insurance Marketplace (sometimes known as the health insurance “exchange”) or also direct from carriers, local agents or private exchanges.
If you are one of the few business owners who feel that the group health insurance market has worked well for you and your people, you can stop reading here. The other 99.9% should proceed.
Positive Changes for Purchasing Your Own Health Insurance
In 2013, about 180 million people purchased health insurance through their employer while 12 million purchased their own coverage. Those purchasing their own coverage prior to 2014 were able to save 30% to 70% over those who purchased via their employer. Why? Because insurance companies could pick and choose healthy individuals to underwrite, while a group plan by nature has to take everyone.
Obamacare changes all of that. Yes, the cost of purchasing your own coverage has gone up compared to pre-2014 individual plans, but according to PricewaterhouseCooper’s Health Research Institute report (February 2014), the premiums found on the exchanges are 4% to 20% lower than comparable group health plans.
And now everyone gets covered. This is why experts expect a major change away from group health over the next decade.
How many businesses are offering group health insurance because they felt this was the only way to provide quality coverage at an affordable price to their employees? Many. How many of these businesses would be better off dropping their group health plan? Most.
So where do you get this coverage? Most people think that they must purchase it from one of the 51 unsecure, dysfunctional Obamacare websites (generically referred to as “exchanges”). This is not so.
Purchases can certainly be made from public exchanges such as healthcare.gov or newyorkstateofhealth.com, while the same rates can be found directly from the carriers (e.g., Blue Cross or United Healthcare), from local agents or web brokers such as eHealth.com, as well as from private exchanges.