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Sep 25, 2013

We are at a watershed moment in the history of employee health care in the United States. As Obamacare gets ready to go live on October 1, many companies are making moves to move their normal company sponsored health care to private health care exchanges.

What’s a private health care exchange, you ask? In a nutshell, it’s very similar to a 401(k) offering, but for health insurance.

Basically, your company will give you an amount of cash, usually similar to what they pay normally for your health care, and you make the decision of what health insurance you want to buy.

Don’t panic, but you have to do this on your own. And insurance companies have figured out how to best take advantage of you and keep within the Obamacare rules.

Companies getting out of the health care business

Your company’s HR/Benefit Pros will bring in an insurance company they contract with to “administer” your private health care exchange, which mimics in many ways the Obamacare public health care exchanges. You will be given many options; might be five, might be 10, it’s all up to the insurance company and your HR team.

Health care insurance will run across a wide spectrum of options. There might be great low-cost plans for young singles, plans designed for families with children, and even plans for older workers. All kinds of options and plans, and exactly what President Obama believes you want — choice.

This will be a disaster for many people, because most people are dumb when it comes to insurance. Also, these plans will more than likely cost you more money.

Companies are going this route for a reason: health care exchanges take them out of the health care business. You will now be responsible for managing your health insurance, not your HR department. I’m sorry, you choose a plan that was cheap because you never go to the doctor and now you’re very sick — it was nice knowing you.

You see, one thing that the Benefit Pros did in your organization was ensure you couldn’t be stupid! They designed plans that wouldn’t allow you to make stupid choices. Basically, they were acting like your Mom. Now, your Mom is you.

Check out this audio cast from Money Talks at – it’s outstanding in breaking down a very complex issue in a few minutes.

Too many choices = bad decisions

I don’t want to call employees dumb, but data shows when it comes to health insurance and options, you’re dumb, just as you are in picking your 401(k) options.

Give you too many choices, and you make bad, emotional decisions. It doesn’t matter if we are talking about your financial future, or your health care future, emotion has no place in the discussion.

There’s a reason most industrialized companies in the world have a single-payer national health care system — people are dumb. Also, when given the chance, companies will find a way to take your money from you when you’re dumb. Insurance companies aren’t going out of business, and they’ll continue to “donate” heavily to political campaigns.

Choice isn’t a bad thing; uninformed choice is.

Be careful, my friends. Change is coming.

This was originally published on Tim Sackett’s blog, The Tim Sackett Project.