Economic pressures on employers and healthcare plan design decisions

¶ … economic pressures do employers face that impact healthcare plan design and selection?

Right now, employers are facing shifts in Medicaid and Medicare costs, with some of those costs moving to the states instead of the federal government (Rosenbloom, 2011). That is a concern because many employers rely on the federal programs that give tax breaks to companies to help them pay insurance. Increased taxes are also appearing for many companies, because there are tax breaks that are ending and a rising cost of living (Rosenbloom, 2011). Economic pressures are significant for employers today, and some of those pressures are so strong that they are causing companies to stop offering healthcare to their employees because they simply cannot afford to do so. The design and selection of healthcare plans are also affected, as the employers that do offer plans are offering fewer of them and not paying as much of their employees' premiums (Rosenbloom, 2011).

Global competition demands that employers reduce the cost of operations, and healthcare is one of the first things to go (Rosenbloom, 2011). Foreign companies do not have this same worry as U.S. companies, because they have national healthcare plans that have low premiums. They are not struggling to pay for employee healthcare on top of their other expenses, and that can give them an advantage (Rosenbloom, 2011). Good healthcare, though, is part of the draw of a company when it is attempting to recruit new talent, so there is a balancing act that has to be addressed where that is concerned. Healthcare costs are outpacing CPI, but companies that want to keep (and recruit) good people must pay to insure their employees in order to remain successful (Rosenbloom, 2011).

2. What types of health insurance programs have been developed to address these economic pressures? What do these programs have as their prime importance?

There are several health insurance programs that have been developed to address the economic pressures that are faced by employers today. These include managed care plans, health maintenance organizations (HMOs), preferred provider organizations (PPOs), point of service options (POS), and consumer driven health plans (Rosenbloom, 2011). Not all of these are right for all situations, of course, and it is very important that employers carefully think about which option they want to use to provide healthcare coverage to their employees. Most employers use PPOs and HMOs because they tend to provide the most coverage for the lowest cost (Rosenbloom, 2011). Still other companies are hiring employees as part-timers, and when they do that they are not obligated to pay for any kind of medical insurance for them. While that is not the right choice for all companies, it is becoming an option for companies that are struggling to pay their bills (Rosenbloom, 2011).

All of these insurance options have cost containment as their prime importance. In other words, if a plan seems great but it costs too much the employer will not be using it (Rosenbloom, 2011). Plans have to be affordable for the employers to use them, and if they are not affordable they will have to be changed or done away with altogether. That can stop a company from having a good advantage when attempting to recruit new employees, and can also cause current employees to look for a new company with which to work (Rosenbloom, 2011). While frustrating for the company, it is completely understandable for the employee. By keeping costs lower for the company, though, more of the employees of that company will be able to have health insurance (Rosenbloom, 2011).

3. What are the high level characteristics of Managed Care?

There are several high level characteristics of managed care that are important to address. The plans that are offered are designed to have incentives and disincentives that are intended to redirect the delivery of medical care (Rosenbloom, 2011). Some of the options offered under these plans are access restricted and only specific groups can receive them. Additionally, there are preselected providers that must be used in order to ensure that the coverage "kicks in" properly (Rosenbloom, 2011). If the correct providers are not used, the insurance may not cover the appointment or the procedure, and that could be highly detrimental to the financial health of the patient (Rosenbloom, 2011). The way the healthcare plans are utilized is also something that has to be considered, since there may be incentives and other perks to specific types of utilization (Rosenbloom, 2011).