Healthcare costs for a family of four will exceed $20,000 annually in 2012 for the first time, as reported by Milliman Medical Index (MMI). This is a 6.9% increase over 2011 and an increase in excess of 113% since 2001. This $20,000 expenditure is not solely based on the net cost of health insurance; rather, it is being triggered by rising costs of hospital care, physician services, retail drug use, and other services passed onto the consumer. Families are being tasked with bearing a greater portion of rising costs for services and premium increases. Employers are sharing in this burden and face difficult decisions impacting employee morale, retention and recruitment.
It helps to see what the national averages are for premiums and contributions when evaluating how much premium cost sharing an employer should have for contributing to the medical coverage for a family plan. Below you will find the results of a survey conducted by the Kaiser Family Foundation in their 2011 Employer Benefits Survey. Please note, the actual cost to the worker is much higher when we factor in copays, deductibles, and co-insurance. How does your organization compare?
|
Family Coverage PPO Plan |
Worker Contribution |
Employer Contribution |
Total Premium |
|
Small Firms (3-199) |
$ 4,502.00 |
$ 9,917.00 |
$ 14,419.00 |
|
Large Firms (200 or More) |
$ 3,921.00 |
$ 11,827.00 |
$ 15,748.00 |
Here is one thought to help employers recruit and retain talented employees with a powerful benefits package. Evaluate consumer and value-driven medical plans with a $1,500-$3,000 deductible paired with an HSA or HRA with a built in wellness contribution. The only way to truly reign in medical costs and gain a coveted “rate reduction” is to improve the health of an organization and educate employees to be better consumers of health services. We can show them what is covered at 100% thanks to the Affordable Care Act and also how to use online tools to shop for the lowest price service. Why pay $5800 for a Cervical Spine MRI at a hospital when you can get the same MRI at an imaging center for $1800[i]? Look for more solutions to control rising healthcare costs in the next newsletter.
[i] http://www.newchoicehealth.com/Directory/CityProcedure/Virginia/Richmond/43/MRI%20Cervical%20Spine