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Will Your Health Plan Become Like Your 401K?

The Affordable Care Act wasn't aimed at people who already get health care through their employers, but it's having such a revolutionary effect on the marketplace, they might end up feeling its effects anyway. 

Connecticut's exchange, Access Health CT, is all about trying to sign up the more than 300,000 people in the state who currently don't have a health insurance plan. But it's also been thinking strategically about the future of health care. "We believe that we're witnessing a mega trend," said CEO Kevin Counihan at a board meeting this week. "The mega trend is the 401k-ing of health insurance."

What does Counihan mean by the 401k-ing of health insurance? Well, remember what happened to the good old fashioned pension plan at your company: it became a 401k. Counihan said, "I think we're going to be seeing, over the next five years, a migration, not by the whole market, but by a significant segment of that market, into defined contribution, where an employer is going to give an employee a set amount of money, and say: go to an exchange, and buy what you want."

So, instead of a defined benefit -- the plan you sign up for through your employer -- you may get a defined contribution, or a payment to go out into the marketplace yourself. It's already happening at places like IBM, Time Warner and AOL, all of which have moved some of their retirees into a private health insurance exchange.

It's a radical change for people who've previously been used to simply signing up for the company plan -- now they have more choices and more responsibility to pick wisely. Counihan said that's why he sees a major role for the state's exchange in providing good education. "One of the most significant demands that our market wants and expectations of us as an exchange is to say, help me find the most value in picking a plan," he said. "It's different than just buying the lowest cost plan, it's different than just buying the plan with my doctor in it, it's how do I get the best deal for me and my family."

Meanwhile, among its core constituency, the uninsured, the exchange is seeing a ramp up in enrollment as the deadline for January 1 coverage approaches. Chief Operating Officer Peter Van Loon told the board, "We're going to have our largest week so far, this week. The first three days of this week we've had a thousand members each day. The surge is now." That surge means the exchange has now signed up more than 23,000 people.

There are still bumps in the road. Van Loon said anxiety created by the faulty rollout at the federal level is affecting enrollees here. Some people who've signed up for plans are calling the exchange again because they haven't yet heard from their new insurers. He said, "A lot of people are concerned about: am I going to be covered on the first of January?, and without the carriers getting to them, they feel that they've been cast adrift."

There's also concern that the federal government's subsidies for low income applicants won't turn up on time. While Counihan admitted that's a possibility, he said it'll be the government's and the insurers' problem -- it won't affect individual customers coverage.

Harriet Jones is Managing Editor for Connecticut Public Radio, overseeing the coverage of daily stories from our busy newsroom.

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