Hidden Costs Within Your Benefits Program
Hidden costs within your benefits program. Increasing healthcare costs continue to affect people across the United States. For businesses, increases of 20%-30% or more are a common occurrence during renewal time and while costs continue to rise, the true cause can often be concealed.
A recent report by Mercer shares that US employers are anticipating another significant rise in health benefit costs heading into 2024. An increase of 5.4% is expected and could be as high as 6.6% for those who do not make changes to their health benefit plans to help reduce or slow expected costs. While specialty drugs, inflation and labor shortages in the healthcare industry are the main contributors to rising costs, increases of this size should be investigated
A LACK OF TRANSPARENCY
Reasons for high costs associated with annual renewals can often be opaque due to a lack of transparency. Costs generated by hospitals can leave patients with surprise medical bills and price opacity surrounding prescription drugs can create confusion for employers and employees, who may begin to question the value of their benefits plan. Employers need to understand where costs are stemming from within their plan and what they can do about it.
Recently, Conner Insurance hosted a special event where three dedicated professionals discussed how they strive to bring transparency and meaningful change to healthcare in Indiana.
FIGHTING FOR CHANGE
During the event, Michael Hicks, who has authored over 50 papers and 3 books throughout his career and is currently a Professor of Economics at Bell State University, Gloria Sachdev, President, CEO, and Board Chair of the Employer’s Forum of Indiana and Donna Schaibley, who has authored and sponsored numerous bills that have been enacted into law, spoke about the current state of healthcare and their plan to drive meaningful change to healthcare in Indiana.
While this event was focused on healthcare in Indiana, transparency in the healthcare industry is not an isolated issue, it is country-wide. Federal laws have been created to fight the lack of transparency within the healthcare system, aimed primarily at hospitals, and while these laws are helping, there are still large gaps that prevent consumers from making accurate comparisons between hospitals.
WHAT EMPLOYERS CAN DO
Employers should speak with their benefits consultants for more information about where increased costs are stemming from and discuss the broad waste and abuse that occurs at the hospital level of healthcare as well as the power behind pharmacy spend. For example, pharmacy benefit managers could be profiting from pharmacy costs, which can affect increases during renewal time.
Employers could also reach out and connect with local and state legislators and individuals who are fighting to gain transparency within the healthcare system so consumers can really see what they are paying for.
WHAT WE CAN DO
At Conner Insurance we work hard to deliver comprehensive benefits that represent your business and its people. If you have questions about your pharmacy spend or would like to discuss strategies to combat rising costs, let’s chat.
As costs continue to rise in 2024, employers need to be ready. Reach out to your consultant and begin conversations about where your benefits spend is going and what your options are.
