TAMPA, FL — November 1st marked the start of exchange sign-ups for 2017 Obamacare coverage. While rates vary in different states, most insurance premiums rose by an average of 25% around the country. Arizona appeared to have the worst outcome with an enormous 145% increase. There are many reasons to these rates increase, a big factor is because insurance companies are leaving the market. Aetna is exiting the exchange in 11 states for 2017; UnitedHealthcare is exiting 31 states; and Blue Cross Blue Shield of Tennessee has announced their departure of three of the state’s largest exchange markets. Is Obamacare imploding?
Tennessee insurance commissioner, Julie Mix McPeak, said recently the exchange in her state is “very near collapse” as she agreed to premium increases of up to 62%. This was after rate increases were authorized in August for an average of 46% for Cigna and 44% for Humana. But while the exchange immediately impacts individuals, how is it impacting employers?
According to Kaiser Health News, big employers can expect health costs to rise by 6% in 2017. Although it may be an average increase compared to previous years, new surveys show that it surpasses economic growth. “These cost increases, while stable, are both unsustainable and unacceptable,” said Brian Marcotte, CEO of the National Business Group on Health, a coalition of large employers that received responses from 133 companies.
No longer able to afford health care at current rates, many employers have turned to high-deductible health plans. However, raising deductibles and shifting health costs to employees is only a temporary fix, and puts financial strain on employees. In order to truly control health insurance expenses, companies need to make changes that will help control claims.
“It’s hard to control something when you don’t know the root cause of the issue. Companies need to identify, realign, and manage their risk in order to truly control the cost of health insurance premiums,” says Doug Short, President and CEO of BeniComp Insurance Company. How does one accomplish that? Through outcome-based deductible incentives.
BeniComp’s patent-pending, supplemental, preventive health insurance product, called BeniComp Advantage, uses deductible incentives that are tied to passing health risk identifiers such as obesity and nicotine use. Low-risk employees can earn low deductibles, while high-risk employees receive coaching toward a healthier lifestyle. The design of the plan lowers total premiums which allows both employees and the employer to realize an immediate return on investment. Executed well, outcome-based deductible incentives can result in over 95% participation, as well as decreased claims.
One client introduced BeniComp Advantage to their employees, which decreased premiums by 22% in the first year resulting in over $182,000 in savings. After three years of having BeniComp in place, this client was able to receive a renewal rate that decreased by $5.36 per employee. Had BeniComp not been in place, this client would have received a 32% increase at renewal. Overall, this client has saved over $650,000 in health care costs during 3 years.
It’s no secret that there is a health insurance crisis in America. Companies can only shift costs to employees for so long without addressing the long-term effects of rising claims. Pairing outcome-based deductible incentives with a high deductible health place represses rising premiums and addresses the claims that are contributing to the future costs of the plan. The result in a health plan that is sustainable for the future.
Founded in 1962, BeniComp later expanded its services to include BeniComp Advantage, a supplemental group health insurance product that identifies health risks early and aims to proactively improve health in America. Offering employee wellness solutions nationwide, BeniComp’s patent-pending policy has received numerous awards for innovation and best practices. BeniComp has been featured in Forbes Magazine, Employee Benefit News, The Wall Street Journal, USA Today, Medscape, and other publications for its innovative approach to providing solutions. For more information about BeniComp, visit www.benicomp.com.