Health Affairs, 25, no. 6 (2006): 1517 doi: 10.1377/hlthaff.25.6.1517 © 2006 by Project HOPE	New Online   Pay Cuts For Medicare Docs   Access To Care Woes   Public Coverage More Efficient   Empowering Consumers

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Strategies

PROLOGUE

Employers’ Health Coverage Strategies

The drivers of this trend were neither subtle nor elusive. Beyond economic perambulations swelling the number of unemployed people, and consequently those blocked from that access point for obtaining insurance, the relentless upward spiral in health care spending played a major spoiler role. As regularly reported in the pages of Health Affairs, health care costs, with some exception, have increased disproportionately for much of the decade. Employers of all stripes, feeling the squeeze on their bottom lines, squeezed their employees in turn by resorting to increased cost sharing and offering high-deductible health plans, both of which inevitably exerted a chilling effect on employee coverage take-up rates and use of health services.

A follow-on from the decline in job-based coverage, as reported by James Robinson earlier in this issue, has been a morphing of the insurance industry itself as it struggled to maintain profitability in the face of such new "realities on the ground." Among the more intriguing industry adaptations has been resignation to the diminution in employer-based enrollment in favor of more aggressive participation in public programs. Such nimble tap dancing has permitted the industry not only to hold the line on profitability but to exceed projections and expectations.

Employers have sought to take a page from this survivalist playbook by formulating new adaptive strategies of their own, navigating both budgetary pressures and employees’ needs. The papers that follow relate the experience of both public and private employers. First, Aaron McKethan, Daniel Gitterman, Allen Feezor, and Alain Enthoven, drawing on the experience of key stakeholders in twelve of the largest U.S. public employee health plans, explore the breadth of challenges confronting leaders in this genre as they grapple with issues of benefit redesign; changing employee demographics; and the interactions among states, retirees, and Medicare. Next, Susan Busch and colleagues report on Alcoa’s recent strategies for holding the line on health care spending while preserving employees’ incentives to obtain appropriate and essential health care services, including elimination of cost sharing for preventive care.

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