Experts discuss Walgreen's employee insurance move


by JIM BERGAMO / KVUE News and photojournalist Erin Coker

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Posted on September 18, 2013 at 6:21 PM

Updated Thursday, Sep 19 at 10:26 AM

AUSTIN -- Walgreen's, the country's largest drugstore chain is the latest corporation to send its employees to the private health insurance exchange. The company says the change will affect more than 160,000 employees. Walgreen's website calls it "An opportunity for most employees to lower their out-of-pocket health care costs next year."

Under the plan, Walgreen's will -- for the most part -- no longer provide its employees health care plans, but it will continue to share the costs. The move will help lock in costs for companies. But some experts fear employees will end up paying more.

Pam Bratton is the VP of Meador Staffing Services in Northwest Austin. She says even though the money is being funneled in a different way, she likes the idea of companies giving employees a certain allotment to buy their own health insurance on the federal exchange.

"The advantage for the employer is you are kind of locking in your cost," said Bratton. "You're saying we're on this exchange. Here's our cap. You get all these choices from there. The advantage for the employee is you get to pick the policy that really fits you and your family mode, not what the company thinks you should have."

Orthopedic surgeon Bruce Malone is the past president of the Texas Medical Association.  He says Walgreen's and some other companies are turning to the familiar concept of defined contribution instead of defined benefit.

"Your retirement plan, and certainly mine for a number of years, has been a defined contribution - how much I put in," said Malone. "It's not something that's promised to me in the future as a pension without my contribution. That's going to be the same way it is with healthcare. The company is going to define how much it will pay per employee for health benefits."

As healthcare costs continue to rise, some companies like Walgreen's are locking in their costs. But will it be the employees who end up bearing the brunt of those rising costs?

"It's realistic to think the employee is going to have to pay more for the same services that they may enjoy currently," said Malone.

Bratton doesn't disagree, but she says the overall pros may outweigh the cons.

"Businesses, insurance, employees - we're all looking for the thing that will give us the most coverage, the least expense and the least amount year after year," she said.

Under the affordable care act, the six-month open enrollment period begins October 1st.