America's 'other' health

While everyone focuses on 'Obamacare's' controversial public exchanges, big changes are coming to the place where most people get their coverage - at work. Here's how they might affect you.

Imagine a health insurance system for the employee of the future.

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A woman sits at her tool-and-die station, say, in a mid-size company in the Midwest, listening to a self-selected song list on her iPhone14 as she prepares to begin her day. An alert is pushed through her employer-sponsored health-care application, which syncs with its online health exchange, notifying her that a clinic 15 miles away is offering a special: $400 for a routine screening. She is always careful to have one every year, and she is due for an appointment.

She notices now, too, a 3-D pop-out ad on a thin glass interface in front of her, where she is using her index finger to flip through news topics on her personalized morning digest. The ad is promoting another clinic 30 miles away, offering an exam for $350. So she has a decision to make: Her employer's health plan will contribute only $250 a year for a screening. It's her responsibility to decide which clinic and which price she prefers. In the end, she chooses a convenient clinic a few blocks away, even though it is charging $500. She's gone there before, the staff have always made her feel comfortable, and she has the means to pay the difference anyway.

Just five years ago, her choice would have been much simpler. Her employer would have offered health insurance through one carrier. She would have made an appointment within her network, had the exam, and paid her $25 co-payment with cash. But since then, her company has shifted to a private exchange in which she and other workers have to shape their own plans, choose the benefits they want, and select the networks from which they will get their services.

The system gives them a lot of choice - and can potentially save them money. But it also requires individuals to make a number of complex decisions, and 'shop' for services.

Welcome to the system that may soon be coming to a cubicle near you. While headlines have focused on all the rancor surrounding the public health-care exchanges being set up under President Obama's health reform law, businesses across the country are moving to change the coverage they offer employees in ways that are just as dramatic - and may end up having a bigger effect on individuals' lives and the US economy.

From taking tighter control over the health insurance market themselves to pushing decisions and costs down to individuals, businesses are experimenting with a host of new ways to offer health-care coverage, spurred in part by the launch of the Affordable Care Act, but also by the inexorable rise in the cost of medical care in the United States. The moves promise to change a social compact that has existed between employers and employees over health-care coverage for more than a half century.

Already, for instance, several large corporations have announced they are setting up private exchanges like the one the fictitious tool-and-die maker belongs to. More than 1 million workers are set to purchase plans on a private exchange in 2014, and by some estimates, as many as 40 million workers will be enrolled in such private exchanges by 2018.

'Going from 1 million to 40 million in five years is ... hypergrowth,' says Rich Birhanzel, managing director of Accenture's Health Administration Services.