Reforms mean broader role for health plans

A Booz & Company study titled "The Future of Heath Insurance" forecasts how health reform will shift the landscape for health plans, predicting they will emerge with specialized capabilities targeted to specific customer segments.

The study found that most large and mid-sized employers will continue to offer traditional employer-based insurance, that healthcare reform will lead to a larger overall market for health insurance, and that 5 to 7 million employees will exit employee-sponsored health plans by 2016.

Those exit numbers may not be as alarming as they sound.

"One could imagine it's merely a shift in the status and not necessarily a shift from one insurer to another," says Gary Ahlquist, Booz & Company senior vice president. "In Massachusetts, for instance, when it brought up its connector, Blue Cross Blue Shield (BCBS) got at least its share of past business."

The study indicates that health plans will experience a gradual but steady erosion of their fully insured group business, as exchanges create a retail environment in which customers shop for healthcare plans in the same way that they currently shop for life insurance.

"Payers will have to figure out how to play a role in exchanges," says Ahlquist. " I think the payers' role will change to a broader one - a mass market or multi-segment role. In this case the biggest shift is coming at the small group, small business end of the spectrum that tends to be the traditional face of the BCBS system. They will perhaps be most affected by the change since that is the core of their business."