The rollout of the Affordable Care Act has been a mess. The Obama administration had three years to prepare for the launch of its health insurance exchanges on Oct. 1, yet millions of Americans can’t get past the sign-up process, the website has repeatedly crashed, and the lucky few who have gotten through have reported premium sticker shock.
Meanwhile, more employers are dumping their employees — like the 55,000 workers at security guard firm Securitas — into this laboring system. With Washington responsible for 36 state exchanges and thousands of pages of regulations, the problems are not an aberration, say experts, but an inherent feature of the system.
“Remember that the exchanges sell a product that, thanks to Obamacare, nearly every American is now required to buy, on pain of a ‘tax penalty,’ ” writes health care expert Avik Roy of the Manhattan Institute. “How do we force people to buy a product that Obamacare’s exchanges aren’t competent to sell?”
It doesn’t have to be this way.
Just look at the success of a private health exchange set up by Aon Hewitt health consultants to serve the diverse workforces of Walgreens, Sears, Darden Restaurants, and other large employers. Their lessons provide answers to Obamacare’s flaws: 1) Deregulate the exchanges to encourage more choice and 2) extend the business tax credits to individuals to expand coverage and lower costs.
Determined to provide health care for their employees in a competitive labor market, yet wary of centrally-planned, government-run exchanges that resemble the troubled Medicaid system, corporations in the Hewitt exchange give their employees “credits” (subsidies) to shop for the insurance plan that fits their needs.
Walgreens’ 160,000 employees are currently signing up for insurance plans that go into effect on Jan. 1, 2014. Yet employee sign-ups have gone smoothly.
That’s because the exchange’s private contractor, Aon Hewitt, has had to meet customer demands or lose business. Unlike the one-size-fits-all, over-regulated federal model, Aon Hewitt has listened to its clients. The consulting firm first beta tested its exchange in 2011 — on its own employees.
Contrast this with database programmer Luke Chung’s analysis for CBS News of the federal exchange. “It’s not even ready for beta testing for my book,” he said. Imagine if the Obama administration had first conducted a beta test on its own executive branch employees.
Aon Hewitt spokesperson Maurissa Kanter says her veteran human resources firm, which administers health benefits to 9 million employees, conducts the sign-up period for clients on a rolling timeline rather than opening the doors to everyone on the same day like Obamacare. The test of Aon Hewitt’s glitch-free service? Sears and Darden have renewed their contracts for 2014 — and the exchange has attracted Walgreens and 17 other corporate employers.
Creative answers like the Hewitt exchange have been key to reducing health care inflation in recent years by encouraging consumers to be active participants in their own health plans.
Thirty-five percent of Walgreens’ workforce, for example, is under 30 and single. But rather than premium-inflating, federal mandates dictating what benefits insurers must offer, the private exchange offers healthy young consumers a choice of high-deductible plans that run as little as $5 a month.
Obamacare has doubled down on the worst aspects of the U.S. health system: employer-based coverage and government regulation. Competitive private exchanges teach that more consumer power and less regulation boosts universal coverage and cheaper care.