Let’s Talk Health Insurance
by Max Rispler
Companies, both public and private, are struggling to wade through the murky waters of health insurance. Employers saw double digit increases in the early 2000s and now the ACA (Affordable Care Act or “Obamacare”) has only added to the confusion.
Human Resources struggles to keep up with the rules and claims that pile up on their desks. It is a headache for everyone, but healthcare is a necessary evil that companies need to have to attract and retain quality employees. The cost of health insurance continues to be one of the top four expenses for most companies. Renewals are usually between eight and ten percent increases each year. Most companies are not growing fast enough to keep up with the extra expenses that this insurance entails. This leaves employers in a tough situation of whether to provide insurance or take the tax penalty under the ACA.
How can companies offer great benefits as well as get ahold of the runaway healthcare costs?
A revolution is underway in the world of healthcare. This starts from the top down and includes changing the consumer behavior. Flipping the script does not happen overnight, but employers are putting plans in place to curve overutilization of their health insurance. Investing money up front in the preventive care of employees and switching to a consumer driven health plan (high deductible health plan with a Health Reimbursement Account/Health Savings Account) allow for drastic cuts in cost.
Being proactive instead of reactive is the opposite of how most people perceive their health. The long-term rewards of a healthy employee population outweigh the investment costs. Employees cannot do this all by themselves. They need help from above or a third party to find centers of value. These are places where the service, quality, and price are better than competitors. Once these centers of value are found, incentives or disincentives can be put in place to encourage smart consumer behavior.
It is amazing that many elective surgeries can have a wide range of costs. For example, a rotator cuff surgery can cost on average between $8,400 and $56,200 in the United States. Most people are under the belief that quality and price are correlated, but in healthcare this is not the case. The quality is better at a lower price point due to the more practice/surgeries that a team gets in a year.
A tiered drug system is another component to help companies cut costs. The price difference between generic and brand name drugs is astounding. By cutting down on use of brand name drugs and making generic drugs free to employees, money will be saved. This is a concept that reaps surprising benefits to both employees and employers. These concepts are not new, but they are underutilized by most companies. This allows for health insurance costs to run rampant.
What is the future of healthcare and how can companies relieve the headache that it causes?
The future of healthcare is ever-changing, with new regulations coming out each day. This has led to confusion and/or anger towards the government and healthcare. Hiring an insurance broker to outsource your employee benefits is the best idea. Their specialty is understanding the intricacies of group insurance. They can help to set up insurance plans (health, dental, vision, LTD, STD, AD&D), change the consumer behavior of employees, fight wrongful claims, and keep the company in compliance with ACA regulations.
Telemedicine and medical tourism are on the rise around the world. These are relatively new ways for employees to seek out care. New technologies are changing the landscape every day, but insurance brokers are enabling companies to take back control of their health insurance spend.
Brown & Brown Insurance has been taking care of clients for over seventy-five years. We care about the future of our clients, and we show clients how to contain their costs both short and long term. This is a proven system that works for both private/public and small/large group. If you have questions or want to know more, please call me directly at 586-446-3563. You may also contact me via email at [email protected]
*“Medical Cost Trend: Behind the Numbers 2019.” www.pwc.com, 2018, www.ehidc.org/sites/default/files/resources/files/hri-behind-the-numbers-2019.pdf.