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Health plan costs may stay elevated until broker incentives change
Vensure’s chief benefits officer links rising group health costs to an ACA-era pricing structure, PBM conflicts, and a benefits broker model that can reward not changing plans.
Vensure Employer Solutions’ chief benefits officer, Dan Thompson, said the US group health insurance market is facing more than short term pricing pressure, arguing it reflects structural problems tied to the Affordable Care Act framework, pharmacy benefit manager conflicts of interest, and a benefits broker distribution model that he says rewards inaction, according to Insurance Business.
Thompson cited the ACA signing on March 23, 2010, pointing to the law’s medical loss ratio requirement for large group coverage, which he said requires insurers to spend at least 85 cents of every premium dollar on claims and retain no more than 15 cents.
He said the MLR mandate changed the relationship between health insurance premiums and wages, arguing that before 2010 the two tracked at a roughly comparable rate of increase, while that pattern shifted after the ACA.
Thompson said Vensure oversees benefits for about 2 million workers across roughly 27 professional employer organizations and 29 payroll bureaus, and warned consumers face a dangerous financial construct without a clear alternative that addresses these underlying drivers.