“Fire” – Obamacare is Not the Only Healthcare Plan That is Burning


I had a short conversation today with a woman that was somewhat surprising and maybe very telling. I was having a prescription filled and I spoke briefly with the women handling my order. I had to give her my new insurance card (third carrier in 3 years) and mentioned how I had to switch often because of price increases. She then told me that she had a $4000 deductible and close to $15,000 in debt from medical bills. I was shocked. Her employer is a major employer and more than likely a benefactor of Obamacare, yet her deductible is $4000 and she has medical bills causing financial duress. I would imagine this story plays out across America. It is a system that is more than broken. It is on FIRE!

In this political environment where Obamacare is in the news daily I think the problems with employer-based insurance gets lost in the discussion. It seems like people have created a one-to-one relationship between Obamacare and the Exchanges. It is the Exchanges getting huge increases. Insurance companies are leaving the Exchanges because of big losses. Many markets only have one option. And of course you won’t have to switch your doctor. All this noise may be hiding the fire that is also burning in the employer healthcare market.

On the employer side, some of the same dire stories are playing out except the press seems to be ignoring them. Sure, if you look for stories like I do you will find them, but they aren’t on the front page of the NY Times or the lead story on the Nightly News. Relative to the fire burning in the Exchanges the employer fire is smaller, but it is still a big fire. I am sure the woman at the pharmacy was much more concerned about her personal “fire” from her healthcare expenses than what is going on with the Exchanges.

If you have employer based insurance, then you more than likely have a single medical insurance option. Your contributions may have increased by 30% or more over the past few years. Your deductibles and coinsurance may have doubled. You don’t even know what coinsurance means. And the odds are greater than 50% that you don’t have enough money in a savings account to pay for your deductible if needed.

If you are an employer, you are tired of the regular rate increases and delivering bad news to your employees. You have not been able to give employees raises. You may have tried PEO’s, captives, wellness programs, cost shifting, HSA’s, self-funding on smaller and smaller groups, or private exchanges, to try and control costs, but at best, are these are temporary fixes if they even work at all. I was once asked how can you reduce health care costs. I said don’t hire anyone old. Is that what this will come to?

While the focus of Obamacare has been on the Exchanges, Obamacare technically covers health insurance in its totality. Employer based insurance is a part of it and it is part of the problem. Fixing health care includes all of it, not just the Exchanges. It is all related. Government intervention putting the squeeze on individual policies, small group, Medicare and Medicaid only shifts the problem to employer plans. And when an employer with a younger population counters that action by going self-funded this results in the younger, healthier people, not contributing to the pool. We heard this before, you need the young to participate for this to work. The recent race to get younger groups self-insured impacts the entire system. The game goes on.

We can all speculate as to what Trump is going to do to try and fix the healthcare problem. Based on what I have been reading his focus is not limited to the Exchanges. He recognizes the problems span the entire healthcare industry and that includes the problems with employer-based health insurance.

For benefits brokers it would be naïve to think that the only change to employer-based insurance will be the elimination of the employer mandate. There is a fire burning at the employer level too and this fire is not unrelated to the other fires burning on the Exchanges. Most of the conversations I hear, or articles I have read, reference the Exchanges as something totally separate from employer-based insurance. I believe one can’t be solved without significant changes being made to the other. Anticipating what those changes will be and becoming part of the solution is a big opportunity. Stay tuned because we are about to see what the next administration has in store.

Beware the Benefits Blind Spot


In the most recent election the one thing we learned was that the media, and probably most Americans, had a blind spot. For some reason, they did not want to see or hear what many Americans were thinking. And maybe, for some reason, people did not want to say what they were thinking, until that is, when they went to vote. Now this is not a political discussion as I am sure many are tired of political debates by now. But this does remind me of an article I wrote this spring titled, “Two health care stories – Which do you believe?”, that is worth bringing up again. In the article, I wrote about two stories being told about how to solve the health care problem in America. The problem is the noise created by one side was drowning out the other, creating a benefits blind spot.

Now that Trump has won the election the articles and chatter about how Trump is going to reform healthcare is growing at a rapid pace. The noise is getting loud again. Yet, as I read some of the articles, blogs, and chat going on, I am sensing that the benefits blind spot still exists. It may be getting even worse now that the Hillary plan of a public option appears to be in the rearview mirror. Having such a blind spot, when running a business, or when running for President, can have negative consequences.

I don’t recall where I read it but I once read that one of the keys to marketing and messaging is to try to say what the buyer is thinking. And buyers don’t always tell you what they are thinking, even when you ask. So, you need to try to understand the buyer. To do this you need to ask and answer some tough questions, as if you were in their shoes.

What do employers want? Do they want to be worrying about whether they just hired a person who has a wife at home pregnant with triplets? Do they want to be telling their employees their costs are going up again every year? When I spoke at a conference about Private Exchanges I asked some employers why they would be interested in a Private Exchange. You know what the answer was. They thought a Private Exchange would get them out of the health insurance risk business. It was an out for them, at least they thought so.

What do employees want? Or maybe we should be asking, what do consumers want?What is more important for most people, broader access or lower costs? Do they want portable insurance? Do they want penalties for not participating in a wellness program? Do they want national healthcare?

When you think back on the Presidential campaign there were signs everywhere of a potential Trump victory. Trump rallies were like sold-out rock concerts. When I was in Florida on Election Day I mentioned to my wife about how many Trump signs we saw and how few Hillary ones there were. The Trump campaign apparently saw things most didn’t. In the final days, he was campaigning in states like Michigan where most people thought he was going to lose. Maybe the signs were there but people either did not want to see them or were simply not looking. It appears Trump was delivering a message many people wanted to hear.

This may be happening in the healthcare market right now. It is not just ObamaCare that is broken. ObamaCare could be an unintentional distraction that may be creating a blind spot as to what is going on. There may be a silent majority that wants a different type of healthcare system. And they won’t tell their broker or insurance carrier because in their eyes you may be part of the “establishment”. And the establishment often does not want change.

To prepare your business for the future one needs to understand what the future will look like. To do so will require that you eliminate the blind spots. I have shared my personal views about where I think the market is going several times in the past. The Trump election has changed it a little but I too have to be careful so that I don’t bias my own views. If the healthcare market goes to where I think it is going I believe there are big opportunities for those that provide value in the new market. But what about those that don’t change. Well, it was Barack Obama that said clearly, “Elections have consequences.”

What is the Secret to Your Success?


I have been writing blogs, conducting webinars, and speaking at conferences for some time. They say this is what you should do to market yourself or your company. Personally, I simply like writing and speaking. I also enjoy an intelligent discussion with educated people. One thing I have always struggled with is divulging too much information. Everyone says that you should blog and tweet, and do whatever else to get your message out, but you know what, I am beginning to think that this is not always a good idea.

I always refer to “when I was an athlete” which these days seems to be getting further and further in the rearview mirror. But when I was an athlete we always depended on secrets. In football, we would never show the other team our playbook. We would run play-action fakes to make the defense think it was a run when we were passing. When pitching, my goal was to fool the batter. I certainly wouldn’t announce to the batter when I was throwing a fastball versus a curve. Fooling the opposition was a part of the strategy. It was something we did to improve our chances of winning.

In business Steve Jobs would fire someone who would disclose their secrets. Apple went way out of their way to keep whatever it was they were doing secret. In technology, everyone has secrets.

The formula for Coca-Cola was created in 1886 yet only a few people know the formula. In fact, the formula is stored in a vault in Atlanta. And Kentucky Fried Chicken has two different companies create half of their herbs and spices recipe each so that neither one knows the whole formula. I don’t think either will be writing a blog disclosing their recipes.

When it comes to business I often refer to a quote from Mark Cuban that says, “The best way to predict the future is to invent it”. Peter Thiel thinks that the key to a successful business is discovering a “secret” that few others have yet to discover. I agree with them.

So if I were to ask a person what they think the secret to their future success will be I would not expect to get an honest answer. Yes, you will get an answer like “hard work”, or “treating your employees well”, or some other comment that sounds nice that everyone uses. But the key may be in their secrets. Because business is a very competitive environment and to win you need the element of surprise. It works in sports and is critical in war, so why would it not be in business?

I think there are some secrets yet to be uncovered in the benefits business. Secrets that maybe can make the difference in the future of one’s business. But you won’t find those secrets in some blog. You won’t read about them in some industry magazine. You won’t hear them at some broker association meeting or in some little broker group. And those that are tweeting all day probably don’t have something valuable to tweet because if it was that valuable they wouldn’t be tweeting it.

You shouldn’t expect to find any secrets in this blog either. Because the good secrets – the ones that can bring in customers at a rapid pace – the ones that take weeks or months of thinking and years of planning and execution will not be found in the public domain. If you want to find the secrets you need to start looking in the right places. Sometimes those places are staring you right in the face but you don’t see them because your thinking has blinded your vision. In fact, close your eyes. And open your mind. Challenge your thinking. And stop looking on the outside because the answers will come from within. Because to win the game you may need to strike out the next batter. And it may not come from the 92-mph fastball. It may come from the 75-mph curve.

Is Your Benefits Firm Built to Handle a Benefits Bear Market?


I often reference a quote from Mark Cuban that says, “Everyone’s a genius in a bull market.” When you think about the benefits business it has really been a bull market since I have been in the business, which is 30 years now. Everything seems to be going up, up, up, regardless of the quality of the product or service. Benefits brokers have benefited significantly, getting medical inflation raises for years. Admittedly they have also been adding more services, often at no cost. But this is behavior you see in a bull market. It is easy when the math is in your favor. However, do we even know what a benefits firm would look like in a bear market?

I know what a benefits bull market looks like. Companies good and bad are thriving. Money is spent fairly recklessly. Wages are often above the averages for similar jobs in other industries. There are trips and more trips. Everything is great. Those are the good parts.

Bull markets can also have some negative effects. Weaknesses in one’s business or value proposition aren’t easily recognized. Inefficiency is hidden. Complacency can creep into the organization. There can be a failure to recognize competitive threats. Common business practices aren’t practiced. And a belief that one’s world will never change can blind one’s vision of the future or reality.

But what does a bear market in benefits look like? What can cause a bear market? Commission compression? A move to fee for service? Government intervention including changes in tax laws? Obamacare collapsing? The budget deficit getting higher with rising health care costs being a big contributor? The MLR? Hospitals getting squeezed? Higher deductibles and employee contributions? All these factors appear to be present right now, favoring a need for change. Could it signal a coming bear market?

Warren Buffet loves bear markets because he thinks there are deals to be made. And it is bear markets that allow the cream to rise to the top. Bear markets eliminate a lot of competition. But do we really know who the superstars are? Can we tell the real genius from the bull market only genius? And what does a bear market benefits firm look like? Without really having been in a bear market I am not sure what one really looks like.

If a benefits bear market hits there will be opportunities. Opportunities for those who have anticipated changes; for those who built a model to sustain over the long haul; for firms whose infrastructure can adapt quickly to change; for those who have worked hard to expand their non-medical revenue reducing some business risk; for those who have differentiated their value proposition not by giving things away but by delivering products or services of value that an employer would pay for. Think about that one for a second. Of all those “value added services” a firm provides, what would an employer pay for and what would they pay? Would they pay anything at all?

Much like my financial advisor I don’t have that crystal ball. And it is hard to run a business when things you don’t have any control over can cause you chaos overnight. But hoping the benefits world doesn’t change isn’t a strategy. You also can’t put your head in the sand either. Recognizing business threats is a critical component of any business. Even Apple assesses business threats. So don’t let the first benefits bear market get you down. Some good planning can reap great rewards, even when the world changes. Or maybe we will have a bull market forever. Place your bets!

Webinar Invite – Growing Your Benefits Business by Leaps and Bounds


How does a broker go from 5 employees in their benefits firm in 2005 to 60 today without an acquisition? How does another go from 5 to 200 in just 8 years? Or another that generated $40 PEPM in addition to commission on a single account?

In this webinar we will get into the details of how some firms are skyrocketing while others struggle. We will show you the details of what these firms did to generate rapid growth, and show you how you can do the same.

This is a no-holds-barred webinar. If you want me to tell you what I think you are already thinking, then this is not for you. I am going to tell it like it is.

In this webinar we will answer the following:
• What are these brokers doing that is different?
• How they generate up to $20 PEPM above the regular commission?
• Why their model sustains any changes in healthcare reform?
• What is the difference between faking it and making it?
• The 3-year plan to a better future?

This webinar is a culmination of all others we have done. It puts things in a nice neat package and explains things in a different way. If you want to learn this formula, please click here to register.

Register HERE

The dates are September 9,13,and 16th at 12 noon eastern time.

This is for benefits brokers only.

Consumerism in Healthcare is Not Practical


I read a lot of articles about consumerism and how employees need to be better consumers. And as one who implements technology I am very familiar with most of the decision support tools in the market and all the online symptom checkers. So let me make a bold statement. It is all garbage. I have always thought that individuals will never have enough knowledge to make educated health care decisions. Health care is too complex and always changing so how am I ever going to have the time to keep my knowledge current. I don’t want to, trust me. And the last time I needed health care I was driving very quickly to the emergency room. Not a lot of time the think there.

I recently listened to a presentation that Aetna CEO Mark Bertolini gave a few years ago at Stanford. (you can see it here) The final question asked of him was as follows: “How do you create a more educated consumer in a marketplace where they are being directing their own health care decisions?” What surprised me was his answer.

“Trying to educate to everybody on how the health care system works and the level of detail isn’t going to work. Sorry to say. And the reason is that unless the amount of information I can gather is immediately available and that when I act on it has an immediate response I am not going to pay attention to it.”

With all the articles out there about consumerism and directing one’s own health care I thought I was the only one that had such view.

Every time I have my car fixed I am wondering whether I am getting ripped off. I don’t know enough about cars to “shop the market” for service. I remember watching 60 minutes or one of those shows where they show auto mechanics taking advantage of everyday consumers by doing things people didn’t need. That’s me. I wish I had a trusted auto consultant who would tell me whether I really need the services some mechanic is saying I need. You get my point. If I don’t know whether my car is getting the proper treatment how the heck am I expected to figure out whether my doctor is doing the right thing.

Just last night my wife and I had a debate about the value of multivitamins and we couldn’t even agree on whether they worked or were a waste of money. So I Googled the topic, read a bunch of articles, and still don’t know whether multivitamins work.

Let’s not confuse choosing health care versus choosing health insurance. When choosing health insurance is one supposed to be predicting what their needs are going to be in the next 12 months to essentially “game the deductible”? Insurance is supposed to protect one from an unanticipated event that may cause financial duress if one were not insured. Anything that doesn’t fit into this category is simply a reimbursement plan. Dental insurance is almost not insurance. It is a prepaid reimbursement plan for most. There should be two types of insurance plans. One that runs like dental and is simply discounted reimbursements, and another that is real insurance. It is for this reason health savings accounts should rule the day.

So what is the solution? I don’t like when people run around talking about the problems without giving viable solutions so I won’t do that myself. I always say that stating the problem is easy, it is the solutions that are tough. Let me start with what I would want as a consumer. I would want someone who would give me sound advice as to what is proper treatment. I want someone who has an incentive to do the right thing for me. I want someone who would spend my money as if it were their own.

I think the solution requires properly placing incentives. I want to live a healthy, happy, long, and financially viable life. I want someone advising me who understands my goals which I will safely say that these goals are more than likely shared by many. I am all about incentives. It is funny how when you have the right incentives you get better outcomes. That requires having someone who wants me to be healthy and not just fix me when I am broke. This sounds like the things I would want from my car consultant who would advise me on how to take care of my car. I want my car to last long, be healthy, and financially viable. I am not sure what a happy car would look like.

There are emerging models out there that will provide this type of service. And making consumer based decisions around the small stuff may become common. But as a means of controlling healthcare costs, no way. We all know that the majority of health care costs come from few people with chronic conditions. If I need to have my oil changed maybe I can shop the market. But if I need a new engine I would hope to have a very educated mechanic at my side to help me make the best decisions.

Participate in our 2016 HR/Benefits/Payroll Technology and Services Survey


HR Technology Advisors is conducting our 2016 National HR Technology survey for the small to mid-sized employer market. We conducted this survey two years ago with great success and we are doing it again. Much has changed since then. This survey will help benefits brokers and employers gain an understanding of the following:

• What employers are using for technology (HR/Benefits/Payroll/Time and Attendance/ACA)
• Satisfaction levels with their vendor
• Who is looking for new solutions
• Who they are moving to and who they are moving from
• What employers are looking for from a capability standpoint
• Who is deploying employee self-service via web and mobile
• Vendors employers are using for ACA Tracking
• And more…..

With old brokers and new brokers leading with some technology solution, many giving solutions away for free, we think it would be important to:

• Know what your clients have
• Know what your clients want
• Know who is shopping
• Find out what vendors employers are really using versus listening to the sales pitches from the vendors.
• Provide your clients with valuable market information

If you are a broker and want to participate you can do so by clicking on this link. There is a fee to sponsor the survey and personalize it for your firm. Considering all the money and time brokers are spending on evaluating and paying for technology this is worth it.

If you are an employer and would like to participate send me an email or give me a call. Contact information is below. I will send you a link to take the survey. A summary of the results will be provided when we close the survey.

Participants will be eligible to win a $500 Gift Certificate.

Brokers Click HERE to Participate

Contact information: Joe Markland – 508-530-5043 jmarkland@hrtadvisors.com