Health insurance system to struggle with economic reality – Rocky Mountain Health Plans executive says disposal income to drop while insurance companies try to recoup higher costs

Neil Waldron is no stranger to the insurance industry. He’s worked for both private and non-profit insurance companies over the past decade. Currently, as chief marketing officer for Rocky Mountain Health Plans, he works for a non-profit company that’s been praised for its part in what could be a blueprint for a national health insurance model. But while others at RMHP tout the local system as a good start to a revamped national model, Waldron sounds an alarm bell.

“There will be consistently less disposable income (for families) moving forward,” he told an audience at Mesa State College this week.

“So insurance companies must reduce expenses (in order to keep premiums lower than they otherwise might be). That means reducing labor and increasing automation.”

And insurance companies won’t be the only ones trying to reduce costs even further, said Waldron.  Businesses that are forced to offer health insurance to employees under the Patient Protection and Affordable Care Act might well decide that it’s better to drop such insurance and pay the federal penalty than to foot the bill for such insurance. And such decisions might even  be made by employers looking out for the health of their workers.

A business which currently carries a worker under the company health insurance plan for humane reasons might decide that the business can eliminate the cost of insurance while also ensuring that the worker is covered.  That’s because workers who purportedly can’t afford health insurance will be offered some kind of coverage by the federal government.

“Employers will drop insurance because there’s no reason and they can’t afford it,” said Waldron.

He added that his own company will likely be one of the few insurance companies that survives the financial directives under health care reform. In the end, he said consumers will have fewer choices when it comes to purchasing mandated health insurance.

Waldron addressed an audience on MBA Night at the college and outlined what he perceives as health care reform’s long-term impact on businesses.

The program was sponsored by the Master’s in Business Administration department at Mesa State.