Stephen C. Blaschke, employee-benefits consultant at Fidelity Associates Inc.: We must first examine why we are in the current health-care crisis. There are a number of contributing factors that have caused health insurance premiums to escalate over the years at an alarming rate.

These factors include physician, hospital, and prescription drug costs; insurance company overhead and profits; agent and broker compensation; government programs such as Medicaid and Medicare; waste and fraud; frivolous lawsuits; medical technology; obesity; smoking, and government mandates.

In addition, life expectancy has increased significantly. We all are living longer due to medical advancements and using more medical resources. Insurance premiums increase because of utilization. We all want the best medical care immediately and the best outcomes, but we're appalled at the cost.

The truth is, this isn't insurance at all. Insurance is a risk-management tool that we purchase, hoping that we never have to use it—like homeowners and auto insurance. We buy "health insurance" knowing we will use it. The question becomes, "How much will we use?"

If people would stop smoking, drink alcohol in moderation, maintain a moderate weight level, and take their medications as prescribed, we could save a significant amount of money now being spent on health care. If government leaders think that adding an additional 30 million people to our health-care system will lower the cost, I don't think they understand the real issues. We must control utilization and become better purchasers of health care. Unless we all work collaboratively, to provide "basic health care" to all people, the cost of "health-care insurance" over the next 10 to 20 years will not only continue to increase, but health-care costs will become unaffordable.

Eleanor Roosevelt once said, "In the long run, we shape our lives and we shape ourselves; and the choices we make are ultimately our responsibility."



Mark Newbold, principal and employee-benefits adviser at Moloney+O'Neill Benefits: As we move toward full implementation of the recently enacted Federal Health Care Reform legislation, there are distinct trends that will emerge in years ahead:

•A continued movement toward consumer-driven medical insurance models, featuring health reimbursement arrangements (HRAs) and health savings accounts (HSAs). Health care costs will continue to increase in the foreseeable future, requiring higher-deductible plans in order to reduce premium costs over time. More and more employers will embrace these higher-deductible plans and employees will be responsible for more of the front end costs of medical care. The use of HRAs and HSAs will assist employees in managing those costs over time.

•An increased commitment on the part of employers to implement or expand worksite health promotion programs and provide financial incentives for employees and their family members to engage in behaviors that result in better health outcomes over time.

•An increase in the number of employers with 100-plus employeeswho will choose to partially self-fund their group medical plans in an effort to manage their overall medical and prescription drug spending within their owngroup medical insurance plans. Self-funded medical insurance plans provide more transparency in tracking health care costs for employers and provides them with the needed claims data to track areas of overutilization.

•Health insurance exchanges likely will be the mode of delivery of medical insurance for employer groups of less than 50 employees. It remains to be seen, though, whether this model will result in more efficiencies. A lot will depend on the way in which the exchanges are designed.

•The role of independent employee benefits specialists, brokers, and consultants will continue to be important as employers and employees try to determine the best medical insurance model for their business or organization and continue to need assistance in troubleshooting claims issues and managing costs.

Under minimum loss ratio (MLR)requirements stipulated in the recently enacted federal health care reform act, those employee-benefits specialists likely will be compensated for their services on a fee-for-service basis rather than on a commission basis as currently is the case in most medical insurance plans with less than 100 employees.



Joshua Peterson, benefits producer at Western States Benefit Planning: The true answer is it's anyone's guess. Assuming the system survives the fights, we will see a much more open and transparent focus on the actual cost drivers of health care. What is often lost in the political debate is that insurance is really little more than a funding mechanism to pay for the actual costs of health care.To truly address the rising costs of health insurance, we must address the root causesbehind the escalating costs of health care.There are many.

The No. 1 issue, I believe, can drive health-related expenses down is addressing the obesity epidemic. Studies have shown that obesity-related claims are the No. 1 driver for all costs. If this isn't properly addressed, the system simply won't survive. Sometimes something as simple as a lifestyle change can dramatically affect the lifetime or immediate costs of health care.A better focus on diet, exercise and preventive health care would do us all good.

Another issue that can drive down costs is having consumers participate as informed and educated buyers of health care.They should have access to the actual costs and an understanding of the cost drivers, particularly those that are within their control.Often, the true costs of health care are masked by insurance payments, provider write-offs, government subsidies, employer contributions, and so on. Consumers make buying decisions based solely on their net out-of-pocket costs.I can't think of another major personal expense that is treated this way in our society.

The system is complex and there is no single cost-driving factor that can be addressed and bent to lessen the ever-escalating cost curve. Contributors include everything from the aging population, increased lifespan, and prescription drug direct-to-consumer advertising, to government mandates, new medical technology, an entitlement mentality, defensive medicine, malpractice insurance, insulated consumers and lifestyle-related illnesses.That's before we address the insurance side, where cost drivers can include administrative, legal compliance, and fraud-related expenses, among others.The current political and legal focus is primarily aimed at addressing the cost of insurance, not the actual costs of health care.

Long term, the system likely will survive but look very different. We might run for-profit companies and insurance agents out of the business and we might all be accessing our health care funding from the equivalent of the U.S. Social Security Administration, the federal Department of Health and Human Services, or state-run insurance exchanges. No matter what happens to the insurance system, one thing is certain: Costs will continue to escalate until we address the balance of the drivers pushing them higher.



Craig Culbertson, a Spokane employee-benefits adviser: When the Employment Retirement Security Act (ERISA), was passed in 1974 after a long and contentious national debate, health care generally and employer-provided benefit plans specifically, became one of the most regulated industries in the U.S. economy.

Along with ERISA and its amendments, such as COBRA and HIPAA, a plethora of legislation has been added to the regulatory landscape, including rules concerning family medical leave, age discrimination, genetic discrimination, fair labor, and children's health. In all, 26 separate federal laws have been added that directly or indirectly regulate medical insurers and employee benefit plans nationally, not including Medicare and Medicaid rules, or regulations adopted by the states.

While the rhetoric in Congress and the White House suggests that there's been a lack of "significant regulation," the reality is that medical insurance and group plans are heavily regulated and have been for many years. Those who have worked at the ground level in the medical coverage field know that the so-called abuses of the insurance world often are overstated for political ends. I concede that insurance companies are easy targets, but that target becomes less clear when viewed through the lens of the aforementioned 26 federal laws. For almost every piece of paper an insurance company issues, or every policy an employer implements, you can be sure, there is a regulation for that.

Come forth The Patient Protection and Affordable Care Act of 2010 (ACA), with its regulations promulgated and administered by the Department of Health and Human Services. That's a curious choice by the administration, as HHS has no practical experience in administering health-care plans, yet has been charged to implement a law that gives the agency broad authority to decide how all health plans will function.

Indeed, the statement "The Secretary shall determine" and others like this appear more than 1,000 times in the document. With most of the definitions in ACA yet undefined, employee benefit attorneys and consultants wait on the HHS to issue guidance on how employers are to interpret and apply the law in harmony with the other 26 federal laws. No doubt we will see in years to come many legal rulings that will further define its application, and our legal institutions will become the primary parent of this law's behavior.

The outcome of the constitutional challenges to the ACA in federal court are more difficult to predict. Various other courts have dismissed the challenges on procedural grounds, and at least two courts have upheld the law as constitutional. These cases are being appealed and, ultimately, depending on the outcome at the federal appellate level, the issue could be decided by the U.S. Supreme Court. The current makeup of that court, with a host of relatively recent Bush and Obama appointees and a well-known swing vote in Justice Anthony Kennedy, gives us no real indication how the case could be decided. Moreover, even if the ACA is declared unconstitutional with respect to the individual mandate, a significant question remains on the issue of severability, meaning whether the unconstitutionality of the individual mandate invalidates the entire law. Despite these uncertainties, however, it's unlikely the law will be repealed or declared unconstitutional in its entirety.

Regardless of the anticipated challenges to come, the future of health care in America seems to include more regulation and more cost to employers and employees. Already, we have seen insurance companies in many regions begin to withdraw from the small-group and individual markets with an expanding interest by small employers to self-insure, in part due to the anticipated market retraction. Keep in mind that some of the major provisions of the ACA have only been in effect for five months.

Lastly, in the few years remaining prior to the law's full implementation in 2014, we can expect a significant shakeup of the medical billing system as the code doubles in size in October of 2013,increasing health-care provider costs, and the intrusion of employers into families' personal finances at the behest of HHS and the IRS.

Unless tossed out by the courts, we also can expect the requirement that individuals prove they have insurance or face a penalty, along with additional penalties for those employers who don't help them pay for it. These are just a few of the changes that those of us who have actually read the bill are preparing our clients for.