With premiums expected to rise another 6.5% in 2024, companies are scrambling to find health insurance plans good enough to attract employees. According to benefits consulting firm Mercer and Willis Towers Watson..
Healthcare industry experts said they are concerned that the current model is unsustainable.
“For employers, this has been an ongoing and steady challenge for the past 10 to 15 years,” said Marianne Fazen, the association's executive director. Dallas Fort Worth Business Group on Health, helps businesses manage healthcare costs. “but Costs are now so high that employers are struggling to control costs and continue to provide the health benefits they offer to their employees. ”
For Texans, rising prices have been part of a trend that has been going on since at least the early 1990s. According to the nonpartisan public policy nonprofit Texas 2036.. But prices could rise in 2024, which could cause some employees to drop out of their plans, forcing companies to either charge employees more or lower the quality of their plans. You may be forced to make a choice.
“It's becoming increasingly difficult for employers to continue absorbing costs, and employers will definitely absorb financing costs,” said Eric Calciano, benefits advisor at New City Insurance, an employee benefits consulting firm. It will happen,” he said. “There's only so much they can absorb until they have to pass on those higher costs.”
Who does this affect?
Employers and employees alike are feeling the pain of high costs, experts say. Employees with single coverage plans pay about $1,400 in premiums, while the average employer pays more than $7,000, according to the association's report. Kaiser Family Foundation.
The growing problem of not being able to pay for health care in Texas has gotten so out of hand that at least half of Texans have put off getting needed medical care in 2021 and beyond, according to a Houston-based health care organization. said Episcopal Health Foundation. According to the foundation, more than 40% of Texans do not receive recommended medical tests or treatments, and 35% do not receive prescriptions due to cost.
Fazen said that employee neglect of preventive care will become a problem that will catch up with people and businesses in a few years, as employees' health conditions deteriorate over time.
Blue-collar workers feel the most pain from skipping care, she says.
“They tend to have more severe symptoms, more chronic symptoms in their lives. Incentives to treat them early are important, but they're not often followed,” Fazen said. Ta. “Then you just don't have the money to buy medicine, and your symptoms get worse.”
Fazen said adding benefits to employer-provided health insurance only increases the burden on employees.
“Companies want to promote preventive measures such as cancer screening for early detection and prevention, but they are underutilized,” she says. “Some employees may not even have transportation to get to an imaging center or may not be able to afford to take time off.”
Charles Miller, senior policy adviser at Texas 2036, a think tank that studies some of the state's biggest challenges, said companies need to start approaching health care strategies differently.
“For a long time, the conventional wisdom in the insurance industry was that we needed more coverage so people wouldn't skip their medical care,” he said. “However, there is a growing recognition among policy experts that insurance coverage alone will not solve this problem.”
Why are costs still rising?
Hospital consolidation has been a highlight of the healthcare industry for the past few decades.research from harvard business school We show that mergers can increase prices in the commercial sector by an average of 6%. According to the United States, between 1998 and 2021, 1,887 hospitals merged and 2,000 hospitals declined. American Hospital Association.
“It started with small hospital systems merging with other small hospital systems,” said Vivian Ho, a health economist at Rice University and Baylor College of Medicine. “There are fewer mergers and acquisitions today, but the value of deals is so much greater simply because there are no smaller companies left.”
Last year, the Texans expanded its network to 19 inpatient hospitals with Dallas-based Medical City Healthcare's acquisition of Wise Health System. Takeovers are less frequent now, but they can still impact thousands of Texans.
“I think acquisitions are one of the big issues that drives up costs. [hospitals] “If we buy local urgent care clinics and start serving those hospitals and smaller hospitals, we're going to see rates go up for smaller clinics, even in rural areas,” Fazen said. “If they buy a hospital in the suburbs of the D-FW area, they're probably going to charge the same rates as the main hospital.”
But consolidation isn't the only thing driving up prices. Texas' traditional fee-for-service Medicaid model, in which providers are paid fee-for-service, can spiral out of control for employers and employees who want to keep prices low.
“While we do see consolidation, there is also the fact that employer-paid healthcare systems are piecemeal,” Fazen said. “It's a really huge revenue model, and it's very difficult to control. The more services that are offered, the more the prices keep going up.”
Calciano said advances in medical technology are driving up prices, hospitals remain understaffed and manufacturing costs for specialty drugs remain high.
“I think people are starting to realize that the estimates of how much prices are going to rise are the largest they've been in about 10 years,” he said.
What can we do to prevent rising costs?
Experts say cutting costs will require a concerted effort from employers, employees, and state and federal governments.
For employees, the most important thing they can do to keep costs low is to become eligible for health care, Calciano said. But they also need to consider the difference between expensive but often high-quality PPO plans and more affordable HMO plans, and despite previous loyalty with their health care provider, new You have to be willing to consider your options, Fazen said.
“The employee might say, 'No, my family always goes to another hospital in the area,' so we'll go to the other one.” It could be more expensive or not enough. “We may not be able to provide adequate care,” she said. “Employee selection is always an important part of this, and employees need to choose wisely.”
Rice University's Ho said companies will need to restructure their healthcare plans after 2024.
“It's up to employers to start thinking more wisely about what kind of health care they buy. I generally believe that CEOs and executives at large companies, and their human resources departments, are trying to find affordable health care for their employees.” “I'm disappointed in how people think about getting a quality health insurance plan at an affordable price,” she said. “I think they're going to throw up their hands and say, 'Oh, that's too complicated.' And that leads to the demand for health insurance and medical care becoming completely inelastic.”
Calciano said companies can consider plans where pharmacy benefits managers are not typically owned by insurance companies and target claims as soon as possible. But that means employers need to encourage their employees to get preventive care.
To that end, employers can design benefit plans around shared savings programs. This is a model that relies on employees accessing the lowest cost service provider. In return, employers can reward employees by giving them back some of the money they save from the average price they paid, Texas 2036's Miller said.
“It's finally going to give employers real power to take advantage of this price transparency revolution and start using the price fluctuations that actually exist to guide their employees to receive quality care. '' Miller said. “But we need to … reduce some of the unnecessarily high prices that are being paid.”
Although it may be expensive, Ho said, if more companies use navigator services to help employees and employers choose plans, it could save both parties thousands of dollars.
“We need to tell health care providers that demand is inelastic. If we're going to raise rates, we're going to find an alternative, lower-cost provider,” she said. “But employers are not smart enough to seek them out and work with them. HR professionals are not trained in economics. We need people.”
If your company is strapped for cash, it may be time to increase the amount withheld from everyone's paychecks, increase deductibles and copays, or completely undermine the quality of your health insurance. But there are ways for employers to frame this as a practical solution for their employees, Ho said.
“You have to present that as a trade-off to your employees and say, 'Let's say we take this high-cost provider out of our network.' We're not going to pay them for it. ’s contributions could go down by X% because they were able to find a better health care provider that would provide a higher quality of care, but at a much lower cost,” she said.
Fazen said this will be a critical year for companies that are no longer able to pay their premiums.
“Employees cannot afford high costs and neither can employers,” Fazen said. “With so many large employers using the health care system here, I think providers need to find a way to make it a little more reasonable for employers to maintain this policy. Employers may say, “We can no longer afford to pay for medical care.'' Follow the government system. That is the ultimate end point that can be reached. ”
Approximately 3.3 million Texans are currently covered by the Affordable Care Act. Texas 2036. This is a 194% increase compared to 2020, when the number was 1.1 million.
