Former O-Care adviser: Health insurers will be ‘dead’ by 2025

A key former adviser behind President Obama's healthcare law said the traditional role of health insurers would be "dead" by 2025, predicting massive changes in the industry.

"By 2025, insurance companies as we know them — taking in premiums and paying out — dead," Ezekiel Emanuel, told Reuters at the Aspen Ideas Festival on Monday.

Emanuel said health insurers will shift away from relying on private-sector employers, instead working with hospitals to provide a continuum of managed care.

The former Obama health adviser also predicted the growth of digital medicine and enhanced services for those with chronic illnesses, as well as the end of healthcare cost inflation in the coming years.

Emanuel, the older brother of former White House chief of staff and current Chicago Mayor Rahm Emanuel, has long argued that health insurers will shift away an employer-based system.

“By 2025, few private-sector employers will still be providing health insurance,” Emanuel, who chairs the department of medical ethics and health policy at the University of Pennsylvania, wrote in his recent book Reinventing American Health Care.”

Emanuel said most insurers will shift toward a Kaiser Permanente model of managed care, calling it "the wave of the future."

A May report from S&P Capital also predicted the employer-based system nearly disappearing by 2025.

In 2007, Emanuel co-authored an op-ed in the Washington Post arguing the U.S. should "get businesses out of health care."

Most Americans currently receive health insurance through their employers.

ObamaCare includes an employer mandate, which requires companies with 50 or more employees to provide health insurance. But the provision was delayed until next year to give businesses more time to prepare.