A Smarter Way to Renew Your Health Insurance Plan
Recent publications are all predicting that a second wave of the COVID-19 virus is either already upon us or is imminent. This will have a critical impact on many industries that have just begun to recover from the scourge of the pandemic that hit us last spring and will place increasing pressure on their already fragile financial underpinnings.
This is hitting just as many employers deal with the renewals on the health insurance policies they offer their employees. The average increases that we have seen at Horton have been in the 6 to 12% range on an already high average base of $7,470 for single coverage and $21,342 for families. (Kaiser Family Foundation).
Unfortunately most employers will revert to the age old tactic of shifting increased exposures and cost to their employees in the hopes of “buying” down the increase. Unfortunately, since health insurance premiums are driven primarily by the risk associated with utilization and medical conditions the structure of the plan or its design does nothing to address that risk; it simply rearranges the deck chairs on a ship that is slowly sinking.
Statistics tell us that 1% of employees on a health plan are responsible for 36% of the plan’s cost; 4 in 10 have chronic conditions that make up 73% of the total medical claims of a health plans; and 4% take some type of specialty medication that contributes around 28% of the health care costs. (CIGNA).
If you could control 36% of your cost by targeting 1% of the drivers would you? If you could address the 40% of your population with targeted outreach and programs and as a result help them lead more healthy lives and remain productive employees you would you? Of course you would.
So this year, why not think strategically about the health plan you sponsor and offer your employees and instead of making them increasingly more functionally uninsured (being covered by a policy but not having the money to pay the deductibles) attack the true cost drivers of your plan – medical claims.
This year be strategic about health insurance, like you are with every other operating expense decision you make.