More Health Plan Choices At Work: What's The Catch? : Shots - Health News An Obamacare tax that starts in 2018 may prompt more employers to establish private health insurance exchanges. They'll give their workers cash to choose from a greater variety of plans.

More Health Plan Choices At Work: What's The Catch?

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Shopping for health care on an exchange could be coming to your workplace soon - not a government run exchange like, but one put together by your employer. As Mark Zdechlik reports, that's because companies are increasingly turning to private health exchanges to control health care costs.

MARK ZDECHLIK, BYLINE: Thirty-nine-year-old Steve Heller is maneuvering a forklift with a pallet full of packages in a warehouse in suburban St. Paul.

STEVE HELLER: I'm going right where you're at.

ZDECHLIK: Heller has worked here at John Henry Foster for 15 years. They distribute hydraulic and air compression equipment. Company-sponsored health insurance is a major employee benefit, and now there's a lot more choice in selecting a plan.

HELLER: Before, they just presented what we get.

ZDECHLIK: Now management gives Heller and his coworkers a set amount of money to pick their own plan. In John Henry Foster's case, there are dozens of choices. Employees can choose high deductible coverage with relatively low monthly premiums, or they can pay more each month to have more of their care and medications covered. Heller says figuring out all the choices was overwhelming at first, but there was help.

HELLER: They have a person you can talk to. You can tell them what prescriptions you have and what your family does.

ZDECHLIK: There's also a website to guide employees to plans that best suit them. Heller says he's learned a lot about health insurance, and he's satisfied.

HELLER: I like it better, actually. It is better. It works good.

ZDECHLIK: Management is happy with the private exchange too, says company co-owner Jan Hawkins.

JAN HAWKINS: In 2012, we were actually faced with a 30 percent increase in our medical benefits unlike anything we had ever seen before. So at that point, we had a decision. You know, what do we want to do?

ZDECHLIK: Hawkins says each year since, her company has increased the allotment workers get for health insurance by 8 to 10 percent. Right now, only a tiny percentage of employers send their workers to private health insurance exchanges, but Dr. Jim Bonnette with the consultancy The Advisory Board Company is convinced that will change.

JIM BONNETTE: I would say a majority of the companies will switch to private exchanges.

ZDECHLIK: And Bonnette says many people will choose high deductible plans, and they'll be much more motivated to search out the best value for care. He says that could finally force consumers to pay attention to the price of health care. That's a goal that's eluded health policymakers for decades.

BONNETTE: We can't afford the trend that is the increase in cost per year that we currently have. So how do you get people to think differently about how they receive care and the choices they need to make? You know, this is the economic incentive to start thinking about what things cost.

ZDECHLIK: But shopping for health care is almost impossible, says Sara Collins from the health care policy think-tank The Commonwealth Fund. It's often difficult for consumers to find out how much a doctor visit or a certain procedure costs. And Collins says people with high deductible plans often forgo care to save money and even avoid free preventative care because they don't understand how their health insurance works.

SARA COLLINS: The idea that people who have such low understanding of what is included or excluded in their deductible can actually go out and price shop for their health services I think really stretches the imagination.

ZDECHLIK: But employee benefits consultant Kim Wagner says predictions of a mass migration to private exchanges are overblown. Wagner says some employers are adding more health plan options, but she says giving employees a set amount of money to buy health insurance often leaves them paying more.

KIM WAGNER: The concept of defined contribution of health care has been around for a while. It hasn't taken off, particularly in the large employer space, because truly, it's a cost shift.

ZDECHLIK: But employers may be more willing than ever to seriously consider private exchanges. They'll soon have a powerful tax incentive to contain health care spending. A 40 percent tax on health benefits the government deems to generous kicks in in 2018. It's called the Cadillac tax, but it is not as exclusive as its name implies. Some are predicting as many as half of the nation's employers are on track to get hit with the penalty. For NPR News, I'm Mark Zdechlik in St. Paul.

SIEGEL: And that story is part of a reporting partnership of NPR, Minnesota Public Radio and Kaiser Health News.

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