Health care reform
On June 28, 2012, our nation’s highest court issued its ruling on the legal challenges to the Patient Protection and Affordable Care Act, declaring in a 5 to 4 vote that the law is constitutional.*
The Court’s ruling followed three days of oral arguments last March. Front and center in those arguments was the issue of the individual mandate and whether it was appropriate for Congress to require most Americans to purchase health insurance. The individual mandate was upheld as a legal tax. This mandate is seen as crucial to creating a national risk pool with enough healthy enrollees to keep health care premiums affordable.
The Court’s full written opinion on the case is available at supremecourt.gov.
One thing to keep in mind: The Court’s decision is part of a long and ongoing national conversation that has reshaped the U.S. health insurance market, as well as the landscape of employee benefits, and will continue to do so for years to come. There are too many major forces that are influencing today’s complex marketplace. These forces are driving change and innovation in the way health care is delivered and the way it is financed.
The delivery of health benefits will be influenced by the Health Insurance Exchanges, which are in development by individual states and private companies, largely due to a mandate of the PPACA. The Supreme Court’s ruling left the Exchanges intact. (For more information on the Exchanges, listen to the Exchange podcasts on this website.) The Exchanges are projected to have the greatest impact on the individual and small business health insurance markets.
Another trend that will continue without significant impact from the Supreme Court decision is the rapid growth in Consumer-Directed Health Plans (CDHPs). This is because the PPACA, which is designed to give more people access to affordable health care insurance, does not include any provision designed to directly reduce the actual cost of health care. As these costs continue to rise, these high-deductible plans offer a sensible solution. CDHPs can significantly lower health care costs for both employers and their employees, while making employees more responsible for their health and health care decisions.
These plans are driving another trend: the growth in voluntary benefits like accident, critical illness and cancer insurance, which provide additional financial protection for employees in high-deductible plans because they may be financially vulnerable to the expense of serious illness or injury. These plans are often 100% employee-paid and let individuals choose the coverage that best fits their needs and budget.
One insurance need has remained constant through many years of benefits trends: the importance of disability insurance as a financial safety net. Today’s workers, many living paycheck to paycheck, would be hard-pressed to pay even their everyday bills if an illness or injury forced them to go several months or more without a paycheck. This trend is expected to continue without abatement.
These trends, and the anticipated changes they will bring to the health care landscape, require better educated benefits consumers. If employees do not understand the benefits they are offered, they may have difficulty choosing the benefits that are most relevant to their age and stage of life, and that of their families. And when employees can make informed benefits choices, they are more likely to value the safety net offered through their employers.
This has elevated the importance of clear and effective employee benefits education and communications. (To see Unum research on the most effective education strategies, see the Inside Track report, “Beyond the Usual Benefits 2012, the power of employee education to influence workplace satisfaction.”)
In response to the great need for basic benefits education, Unum recently released a free, online resource for consumers. GetBenefitSmart.com is designed to provide easy-to-understand information on a variety of employee benefits, from health and retirement to voluntary coverage like accident and critical illness. This consumer-friendly website is also available in Spanish at BeneficiosParaMi.com.
In light of these trends, the Supreme Court ruling is more of a stepping stone than a final destination. It is the next word in a continuing dialogue. We hope you will continue to look to Unum for information and strategic benefit solutions as this conversation – and the future of employee benefits – begin to take new shape.
* The Supreme Court made one change to one part of the law. It involves the allowable penalty for the federal government to use if states do not comply with the law’s Medicaid expansion.