The cost of health care in the United States has a reputation for being expensive, and deservedly so. According to a study by the Peterson and Kaiser Foundations, the United States spent more than $3.8 trillion on health care in 2019, and it will soon top $4 trillion. Employers feel that they're held captive to annually escalating health plan benefit costs, and employees continue to see their share of premiums and out of pocket costs continue to increase at a higher pace than inflation and their paycheck.
Faced with this reality, as well as a future that promises even higher health care costs, current and prospective employees will value companies that have their health-related interests in mind. This is especially true following 2020 and the lingering impact of the coronavirus pandemic. Having an attractive health plan could mean the difference between retaining or losing top talent.
We're here to report that it's not all doom and gloom. Benefits advisors can help employers offer great, and even improved, health plan benefits to their employees, often at reduced costs, by breaking out of the box defined by traditional health plans. The trick is finding solutions that provide flexibility. Here are five cost levers advisors and employers can explore right now to offer employees improved benefits while also keeping costs in check.
|1. Self-funding
Self-funding is a huge opportunity to control costs while improving care. Through an insurance provider, an employer signs up for a fixed plan and pays a monthly premium, whether claims occur or not. If the plan members don't use the health care they paid for, the insurance company stands to profit. And that they definitely do. Anthem Inc.'s reported net income for 2020 was $551 million. Another barrier employers face in controlling health care spend is lack of access to utilization information and data that identifies trends. This is especially true for employers with fully insured plans and less than 100 employees enrolled. These groups typically aren't given access to data that could be used to improve the plan experience for members, and to justify or refute escalating premium increases.
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