No. 1: The employer mandate
There is no one size fits all on this – variances must be accounted for with small and large companies. For small companies, providing employee health insurance is declining. A mere eight years ago, 63% of employers offered health insurance to their employees.
Today, it’s dropped almost 20% to 44%. Employee benefits experts predict that the decline will drop off at around 25% by the year 2020. The deal behind the drop is that companies – especially those without large human resource departments – find it too much hassle to bother with, especially with the increased regulations and costs that often accompany health insurance.
Large employers, on the other hand have held steady at 98% for over a decade and it’s expected they will continue to hover in this area through 2020, using healthcare benefits as an enticement to bring in fresh talent and retain it.
No. 2: The individual mandate
Experts believe the newly insured will continue to be subsidized (as in Massachusetts) for the next couple of years, but when fines for being uninsured rise (in 2017), most non-insured Americans are expected to sign up for insurance, rather than incur increased fines.
Another prediction is that, as the U.S. government grapples with its deficit and how to reduce it, it could change the rules that prohibit it from fining individuals who do not receive a tax refund. Insurance policy tools that help consumers more effectively search, a la Progressive Insurance, for health insurance will likely also be in demand.
No. 3: Product design
Reduced networks, prescription formularies, and increased out of pocket costs, as well as expanding self-funded plans, have already been instituted and are expected to be expanded, as health insurance carriers look to counteract increased costs expected through 2020. These and other stock services in health plans will likely be stripped.
By 2020 a doctor shortage is expected to drop on American health care consumers of epic proportions: there will be 92,500 less physicians than the consumer demand will require. This could put a wrinkle in the ability to sell insurance plans, going forward.
Experts foresee a rush to fill this gap by increased marketing of ancillary products, entry of ever more innovative devices and methods of delivery of medical services, advocacy and price transparency, will help offset the loss and keep medical costs down.
No. 4: Politicians
Health care is political, and post-the Affordable Care Act, it is more than ever. However, experts predict that post PPACA’s implementation, the encroachment of political players attempting to maneuver popularity by playing off health insurance fears will wane.
PPACA will only inflate the budget drain of Social Security and Medicare. By 2020, politicians will be focused on cutting back and re-elections.
No. 5: Brokers
30 percent of the current number of medical insurance brokers will drop out of the game, due in no small part to the aforementioned trends. When the dust settles, two types will remain:
The traditional broker
Thinner margins will be stretched even thinner and some agents, which are principally quote providers (soon to be rendered obsolete), will sell their brokerages to larger, national firms who can afford to invest in technology efficiencies that can offset these skimpier margins.
The new broker
These brokers will break away from quote selling, deepen their benefits expertise, and venture into functioning more as advisors. Commissions will continue to be garnered, but they’ll be offset by more consultative functionalities.
In closing, benefits agencies will also expand their areas of expertise, growing to offer new value-added services customers want and will pay for.
- Reid Rasmussen, “5 Benefits Predictions for 2020,” Benefits Pro, www.benefitspro.com/2014/03/12/5-benefits-predictions-for-2020?page=3.
- “Employee Benefits,” BayPoint Benefits, http://baypointbenefits.com/index.php/solutions/employee-benefits.