Looking ahead Featured

7:01am EDT September 20, 2006

If you had a real crystal ball, would you be too scared to ask it questions? Some people prefer not to know the future, based on the feeling that, if nothing can be done to change it, why get worked up about it? But regardless of whether it is good or bad, the real value of knowing the future is preparing for it. Do I have a crystal ball for health benefits? As a matter of fact, I do. Look with me into the mist to see the future.

A return to major medical plans.
The plan design of the future will be a $5,000 deductible, then 100 percent coverage. There will be no co-pays for office visits or prescription drugs. Employees will be responsible for the first $5,000 of health care. Of course, there will always be options for richer plans, but the $5,000 deductible, 100 percent coverage plan is inevitable. There are only two reasons to have medical insurance. The first is to prevent a financial catastrophe. People should not be forced to sell their home and liquidate their assets if they have a major medical problem. The second, and more important, reason is to ensure treatment will be provided if you experience a major medical problem. Health care providers can refuse to treat patients who don't have insurance. Most diseases can be controlled or cured, but if you have no medical insurance, the consequences can be grave when treatment is delayed or denied based on financial hurdles. Preventive care services such as immunizations, cancer screenings and well-woman exams will be covered in full or for very little out-of-pocket expense.

When: One to four years. The trend has already started, but will be rocketed by the Health Savings Account.

Health Savings Accounts
The HSA is the 401(k) of health insurance. HSAs will be as popular as 401(k) plans are today. As with 401(k) plans, HSA programs will provide solutions that make it a no-brainer to enroll. Also as with 401(k)s, it will be a challenge to convince employees to take advantage of it while they are young. Education programs will play an important part of their success.

When: One more year. Although the HSA account is available now, insurance carriers on the whole are not ready on the HSA plan that goes with the HSA account.

Healthier employees
The trend toward obesity will start to ebb and eventually reverse. When: Three to six years, or a few years after high-deductible plans become standard. People will start living healthier lives when the costs associated with being sick sting a little more than they do today. Carriers will become banks Insurance carriers and banks will become one entity. Carriers will buy banks or become banks.

When: It's already here. The HSA has accelerated the carriers to buy or become banks. The reason is a combination of reductions in premium associated with HSA plans (20 percent to 30 percent less than most in-force plans) and seeing money going out the door to financial institutions to fund the HSA. Even property and casualty insurance carriers are becoming banks. State Farm Insurance already has a bank, and is doing very well with it.

Changing role of insurance agents
The insurance agent of the future will provide more services than just shopping, spread-sheeting and assisting with claims problems. Insurance carriers will leverage agents, and so will the client. Agent contracts with insurance carriers will line item more and more specific operational duties that were previously performed by the carrier. Clients will view their benefits agent as an extension of their HR department and demand more services and tools.

When: Two to five years. Although some benefit agencies are starting to do more for their clients, it will take the insurance carriers to force the agents to do more.

I hope this didn't scare you. Your next move, if you dare to look into the crystal ball, is to prepare for the future.

BRUCE BISHOP (bruce@kybabenefits.com) is director of marketing and managing partner of KYBA Benefits, which provides consulting and administrative services to more than 400 corporate accounts, ranging in size from 20 employees to more than 7,000. Reach him at (770) 425-6700 or (800) 874-2244, ext. 205.