WASHINGTON (AP) — If
the Supreme Court strikes down President Barack Obama's health care
overhaul, don't look to government for what comes next.
and insurance companies will take charge. They'll borrow some ideas from
Obamacare, ditch others, and push even harder to cut costs.
Here's what experts say to expect:
Workers will bear more of their own medical costs as job coverage
shifts to plans with higher deductibles, the amount you pay out of
pocket each year before insurance kicks in. Traditional insurance will
lose ground to high-deductible plans with tax-free accounts for routine
expenses, to which employers can contribute.
smokers will face financial penalties if they don't at least seriously
try to quit. Employees with a weight problem and high cholesterol are
next. They'll get tagged as health risks and nudged into diet programs.
Some companies will keep the health care law's most popular benefit so
far, coverage for adult children until they turn 26. Others will cut it
to save money.
— Workers and family members will be steered to
hospitals and doctors that can prove that they deliver quality care.
These medical providers would earn part of their fees for keeping
patients as healthy as possible, similar to the "accountable care
organizations" in the health care law.
— Some workers will pick
their health plans from a private insurance exchange, another similarity
to Obama's law. They'll get fixed payments from their employers to
choose from four levels of coverage: platinum, gold, silver and bronze.
Those who pick rich benefits would pay more.
"Employers had been
the major force driving health care change in this country up until the
passage of health reform," said Tom Billet, a senior benefits consultant
with Towers Watson, which advises major companies. "If Obamacare
disappears ... we go back to square one. We still have a major problem
in this country with very expensive health care."
Business can't and won't take care of America's 50 million uninsured.
proposals for replacing the health care law aren't likely to solve that
problem either, because of the party's opposition to raising taxes. The
GOP alternative during House debate of Obama's law would have covered 3
million uninsured people, compared with more than 30 million under the
After the collapse of then-President Bill
Clinton's health care plan in the 1990s, policymakers shied away from
big health care legislation for years. Many expect a similar reluctance
to set in if the Supreme Court invalidates Obama's Affordable Care Act.
in 2014, the law requires most Americans to obtain health insurance,
either through an employer or a government program or by buying their
own policies. In return, insurance companies would be prohibited from
turning away the sick. Government would subsidize premiums for millions
The law's opponents argue that Congress overstepped
its constitutional authority by requiring citizens to obtain coverage.
The administration says the mandate is permissible because it serves to
regulate interstate commerce. A decision is expected in late June.
federal insurance mandate is modeled on one that Massachusetts enacted
in 2006 under then-Gov. Mitt Romney. That appears to have worked well,
but it's unlikely states would forge ahead if the federal law is
invalidated because health care has become so politically polarized.
Romney, the likely Republican presidential nominee, says he'd repeal
Obamacare if elected.
That would leave it to employers, who provide coverage for about three out of five Americans under age 65.
or without health care reform, employers are committed to offering
health care benefits and want to manage costs," said Tracy Watts, a
senior health care consultant with Mercer, which advises many large
employers. "The health care reform law itself has driven employers, as
well as the provider community, to advance some bolder strategies for
First, employers would push harder to control their own costs by shifting more financial responsibility to workers.
from Mercer's employer survey suggests that a typical large employer
can save nearly $1,800 per worker by replacing traditional preferred
provider plans with a high-deductible policy combined with a health care
account. "That is very compelling," said Watts.
It won't stop
there. Many employers are convinced they have to go beyond haggling over
money, and also pay attention to the health of their workers.
important as it is to manage the cost of medical services and products,
and eliminate wasteful utilization, there has been a strong recognition
that ultimately healthier populations cost less," said Dr. Ian Chuang,
medical director at the Lockton Companies, advisers to many medium-size
employers. His firm touts programs that encourage employees to shed
pounds, get active or quit smoking.
Employer health plans were
already allowed to use economic incentives to promote wellness, and the
overhaul law loosened some limits.
A Towers Watson survey found
that 35 percent of large employers are currently using penalties or
rewards to discourage smoking, for example, and another 17 percent plan
to do so next year. The average penalty ranges from $10 to $80 a month,
but one large retailer hits smokers who pick its most generous health
plans with a surcharge of $178 a month, more than $2,100 a year.
one of the most intriguing employer experiments involves setting up
private health insurance exchanges, markets such as the health care law
envisions in each state. Major consulting firms such as Mercer and Aon
Hewitt are developing exchanges for employers.
As under the health
care law, the idea is that competition among insurers and
cost-conscious decisions by employees will help keep spending in check.
Aon Hewitt's exchange would open next January, with as many as 19
companies participating, and some 600,000 employees and dependents.
concept of an exchange does not belong to Obamacare," said Ken
Sperling, managing the project for Aon Hewitt. "We're borrowing a
concept that was central to the health care law and bringing it into the
private sector. Whether the law survives or not, the concept is still
Copyright 2012 The Associated Press.