What are you waiting for?
Sometimes slow and steady really does win the race. We knew four years ago when the Affordable Care Act passed (March 23, 2010) that, like it or not, change was coming – for healthcare providers, insurance companies, individuals, employers and even state governments. The national conversation on healthcare reform began and although it hasn’t been pretty at times, the transformation to a defined contribution model of healthcare is well underway.
Two recent studies support the oft-reported stat that private exchanges are not only going to thrive, but they are going to surpass the public exchanges by 2018. A year ago when these predictions were made, the main obstacle to faster growth was a lack of understanding of private exchanges and their benefits on the part of employers.
Now, here we are with predictions that IT spending on creation and maintenance of private exchanges is about to mushroom. In fact, MarketsandMarkets research shows that Health Insurance Exchange IT market will grow significantly over the next few years, surpassing public exchanges considerably by the year 2018. MarketandMarkets notes that “Skyrocketing healthcare costs are making increasing number of employers to shift from traditional defined benefit plans to defined contribution plans helping them to manage costs as well as benefit their employees.”
Private exchanges really are the future of how to implement, organize and administer employer-provided healthcare. Employer knowledge and understanding of private exchanges is definitely improving. In fact, 33% of employers indicate that private exchanges are now a preferred approach to providing healthcare to employees, according to Aon Hewitt’s Health Care Survey
This same study notes that: “While more than half (51%) of employers identify complying with government regulations resulting from the ACA as a top priority, an even higher percentage (69%) suggest that motivating employees to change health behaviors will be a significant focus over the next three to five years. This finding suggests employers understand, conceptually, the need to shift from traditional plan management focused on mitigating trend to progressive and effective participant engagement.”
These changes are not without some angst, however. Employers have always had a hand in the healthcare decisions of their employees. As defined contributions models come into play, employeesmust play a more active roll in making decisions for themselves and for their families. Aon believes this shift will allow employers to move their focus to the wellness of their employees in an effort to improve productivity and reduce absenteeism.
So, while employers had largely been watching and waiting as the Affordable Care Act unfolded, it’s very clear now that the employer community is not just understanding how these changes will impact their businesses, they are embracing the change. What are you waiting for?