The post below is a guest blog from CAI’s employee benefits partner, HCW Employee Benefit Services.
Have you heard your employees ask: “Why do I have to pay more for my healthcare plan this year?” or maybe, “I’ve been to my doctor only for my physical this year and passed it, so what’s the problem?”
The answer to these questions is complex, and your employees need the right information from you for a credible response.
To be effective in explaining healthcare plan costs to employees, you need to emphasize the following:
1) Healthcare costs continue to rise. We all know this, but the exact figures bring home the stark impact of what is happening.
- The cost to cover the typical family of four under an employer healthcare plan is expected to top $20,000 this year, up more than 7 percent from 2011.
- The projected increase marks the fifth year in a row that healthcare costs will rise between 7 percent and 8 percent annually.
2) Efforts to control these costs have produced few savings. No reform launched so far to address the situation has made a significant dent in keeping fees down. The impact of the Affordable Care Act may change this, but there are already indications that at least some features of it will place additional reporting and projecting burdens for insurers. That will likely mean the costs of those activities will be passed along to your employees through their healthcare plans.
3) There is no easy solution. Healthcare costs may not improve until the overall health of U.S. citizens improve. While there have been various efforts to encourage groups to diet and exercise more, we lack a national effort designed to curb our bad habits, which is hurting us.
Obesity in particular raises the risk of many diseases that are expensive to treat, and the results are increased premiums for all of us to cover. Higher healthcare costs will naturally follow when the Centers for Disease Control and Prevention:
- Says that 35.7 percent of adults and 16.9 percent of children age 2 to 19 are obese, and
- Predicts that in every state by 2030, the obesity rate will reach at least 44 percent.
Another factor is that the existing healthcare system favors quantity over quality in terms of service. The emphasis for physicians is on patient volume rather than outcomes, satisfaction and cost savings for patients. This setup encourages excessive services and treatments for patients, which leads to expensive healthcare plans for employers.
To lower the costs of healthcare, we need to overhaul changes in these areas in a unified effort. Improved patient outcomes, more efficient delivery of care and reduced health risk factors are all components that must be combined with lower costs per unit in order to lower the total cost of healthcare.
If you need to provide additional information to your employees, contact HCW Employee Benefit Services. We provide employers with those details so they can illustrate what factors are increasing healthcare costs, as well as what employees can do to help their organization keep health plans affordable.
(Photo: Phil Sexton)