Three-quarters of New Jersey residents say they are “somewhat” or “very” worried about the cost of health care services or unexpected medical bills, and more than six in 10 say they are “somewhat” or “very” concerned about the cost of health care services or unexpected medical bills. respondents said they were “somewhat” or “very” worried. Monthly health insurance premiums and prescription drug costs public opinion poll It was released in May by the New Jersey Institute for Healthcare Quality in collaboration with the Rutgers-Eagleton Poll. NJBIZ spoke to experts about some of the causes and possible solutions.
“The sentiment of Garden State residents is similar to the national results reflected in the Kaiser Family Foundation.” study” he pointed out. quality research institute President Linda Schwimmer. A KFF survey released in March 2024 found that about half of insured adults, including those with employer-sponsored insurance, are self-sufficient when it comes to monthly premiums and out-of-pocket costs. indicated that they rated their insurance as “fair” or “poor.” Seek medical attention.
“Individuals and businesses are worried because of the ‘double whammy,'” Schwimmer added. “Insurance premiums continue to rise, with small and medium-sized businesses in particular seeing double-digit increases over the past four years; Employees are being blamed because they are passing on more costs to their employees due to pay.Everyone is paying more and getting less, which increases stress around them. It is connected to
What can companies do to reduce premiums and, in turn, reduce costs passed on to employees?
“The answer depends on the employer,” Schwimmer replies. “Some large employers are self-insured, which provides greater flexibility because they can design benefit packages that leverage proven strategies to reduce hospital and drug costs, among other things. Large employers may also require their insurance carriers to provide network coverage and manage spending in order to implement specific strategies to reduce overall spending. As for , before undergoing the recommended surgical procedure, the employee may be required to go to a specific center of excellence where they will receive a second opinion and agree to a negotiated fee, or medically performed in a hospital. Unless necessary, procedures and tests must be done on an outpatient basis.Large companies can also design formularies to better control drug prices.”
But small businesses generally don’t have that flexibility and leverage, she noted. “Small employers must purchase an ‘off-the-shelf’ insurance plan. In some cases, we may work with your health insurance broker to explore options outside of the regulated market for full coverage, such as level-funded plans. These products may be cheaper because they are not taxed in the same way, and may deny coverage to groups of employers with higher medical risks. ”
But Schwimmer sees the alternative market as a stopgap measure that doesn’t address the problems in the U.S. health care system. “More fundamentally, the best thing we can do to improve our health system and ultimately reduce overall spending on health care is to invest more in keeping our society healthy,” she said. said. “This includes many things outside of medicine, but within medicine it means comprehensive primary care and preventive care.”
Over time, if people are able to connect with a family doctor or nurse who they trust and know, and receive comprehensive care that includes mental health and a range of preventive health services, “You spend less because you stay healthy and stay healthy.” You can solve problems before they become more complex and costly,” Schwimmer explained. “Unfortunately, today we are underpaying for these services and are paying the price for that short-sighted approach. The United States is an outlier in this regard. Only focused leadership can change things for the better.”
growing challenges
as president Executive Benefit Group LLCTom Siino, an independent employee benefits broker, works with many employers and employees who are struggling with the cost of health insurance premiums. “The problem is only getting worse,” said Shiino, who is also a past president of the New Jersey chapter. National Association of Benefit Insurance Specialists (NABIP-New Jersey). “Inflation has risen sharply in recent years, and health care inflation is rising even further. Employers are struggling with expenses and are passing more costs on to employees.”
Part of the challenge, he said, is that “New Jersey has a lot of state-mandated benefits, which sounds great, but it comes at a cost, and health insurance rates are among the highest in the nation.” “It’s there,” he said.
September 2024 report A report issued by the state’s Affordable Care, Accountability, and Transparency Program found that “New Jersey’s per capita spending is growing faster than the national average,” and the difference is 12% by 2026. He pointed out that the increase has increased from 15% to 15% in 2021.
Shiino said the problem is further complicated by the fact that “there isn’t as much competition in the traditional insurance market as there used to be.”
Here’s his advice: “Employers large and small should work with a professional insurance broker, preferably a member of NABIP-NJ, to consider alternative options such as ‘level-funded’ plans.” [a type of self-funded plan where the employer contributes a steady monthly payment to cover costs for administration, and other expenses],HRA [Health Reimbursement Arrangement, a type of health plan that allows employers to reimburse employees for qualified medical expenses] There are also other alternatives that may offer more flexibility and options compared to standard commercial plans. ” [See related story, “Pros and cons: Can an alternative health plan cut your costs?”]
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Despite traditional insurance companies announcing new products, “the underlying challenge remains the cost of medical products such as GLP-1 drugs and glucagon-like peptide-1 receptor agonists to treat type 2 diabetes and obesity.” is high,” Shiino added. . “Drugs like Ozempic and Munjaro, for example, are in great demand, but they come at a huge cost.”
Back in 2003, the late Uwe Reinhardt, a health economist at Princeton University, along with Gerald Anderson, Peter Hussey, and Varduhi Petrosyan, wrote an article on health care investment recovery titled: did. “Stupid, it’s because of prices. Why is America so different from other countries?” Using data from the Organization for Economic Co-operation and Development, they found that the United States spends more on health care than any other country, but receives less in return.
After nearly 21 years, nothing major has changed, according to Chairman Ward Sanders. New Jersey Health Plan Associationa state trade association representing New Jersey’s major health plans.
“Individuals and businesses have a sense that they are paying a high price because they are paying high health insurance,” he asserted. “High premiums are based on high underlying health care costs. It’s all about price. We have a lot of great hospitals and great prescription drugs, but the prices of these services are very high. It often happens.”
Health insurance providers are doing their best to keep costs down, Sanders said. “For example, if you look at list prices for hospital services, you will see that insurance companies are negotiating deep discounts. As bulk buyers, health plan insurers can ensure comprehensive coverage and a wide provider network while ensuring , are constantly fighting for affordability for their members. But negotiations with hospitals and practices are challenging, especially as providers consolidate and so many practice groups are being acquired by hospitals and private equity. It’s getting more and more difficult.”
And just as insurance companies try to negotiate prices with health care providers, large corporations may be able to negotiate with health insurance companies. However, smaller organizations typically do not have such capabilities.
Some employers may rely on professional employer organizations that allow employers to share responsibilities, including benefits. “However, most PEOs want a minimum of five employees,” he added. “Very small employers may therefore be locked out of that option.
Sanders said small employers “should use a licensed broker when they buy insurance, because the broker they buy insurance from is invaluable.” Brokers can choose the best combination of coverage and pricing across carriers and evaluate issues such as cost sharing and network suitability. Obtaining affordable health insurance can be a challenge. ”
