Thursday, December 12, 2013
Walgreen will send employees to private health exchanges for health insurance
The Wall Street Journal reports that Walgreen will put its 160,000 employes on private health insurance exchanges where they'll be able to shop the offerings of several regional and national health insurers. The Journal reports:
Under Walgreen's new arrangement, to take effect in 2014, the firm will pay a fixed amount for employees to select coverage options in a private insurance exchange run by Aon Hewitt, a consulting unit of Aon PLC. The exchange will offer up to 25 different plans in some states.
That Walgreen and other large employers are giving their employes choices of plans on private exchanges and financial incentives to buy the plans they can afford is good for both the company and its employes. Health insurers will have to be more price competitive, and they will force providers to help them win customers by becoming more cost effective.
Since WW II, employers have bought the health insurance plans that worked best for the employers, not for the workers. And they made health insurance look free, which promoted over use of primary care and preventive services that scholars now say are mostly a waste of money for the worried well, but not for those with pre-existing conditions.
This will complicate workers' lives. It will be welcomed by the educated who want to choose their plans instead of taking whatever is offered by their employers. But less educated folks who treat physicians as priests and do what they say will find making their big and complicated health insurance decisions difficult, if not impossible.
Medicare Part D has taught us how difficult it is to shop for health insurance even if you know the health insurance and health care businesses.
The shift of the job of buying health insurance from employers to workers should shrink employers' health benefits administration expenses dramatically.
But employers may plan to put a lot of resources into teaching their workers how to shop the exchanges and evaluate the health insurance offerings. More likely, I guess, the exchanges and competing insurers will educate their customers, possibly on company time?
Change frightens workers. They hate it. And a major change in benefit plans will cause a lot of stress and turmoil if the changes are not managed well. Employee communications consultants will have a field day.
Meanwhile, insurers will have to staff up with marketing and sales staffs. Don't be surprised if you see Kaiser, Blue Cross, Aetna and other insurers' stores competing with Verizon and AT&T for the best sites in your local shopping malls. And insurers will have to advertise as never before. They may save newspapers?