Can Employer Health Benefits Be Saved? 

Health Plan Heroes Are Showing the Way

By Terry Wilcox

For decades, policy wonks have been fighting over how to lower health care costs for patients. In the DC Metro area where I live, every problem is treated as a government problem needing a government solution. Both Republicans and Democrats have traditionally ignored employer-sponsored health care, which was thought to be the “gold standard” that takes the affordability problem off the table. The truth is just the opposite.

The Kaiser Family Foundation conducts a survey of employers and their health benefits every year. The trends are alarming. The average cost of a health insurance policy for a family of four is well over $20,000 and increasing every year by far more than the historic rate of inflation. Families pay almost a third of that sum, and those covered by small businesses pay an even higher share. Half the workers  at small companies and a third of all workers have deductibles greater than $2,000. Deductibles have increased 68% in the past decade. 

Chronic underinsurance – defined as insurance coverage that does not protect a patient from catastrophic financial impact of medical costs – is an epidemic among Americans who get their insurance at work.

When patients can’t afford their care, they delay it or go without, and studies have shown that it’s the sickest patients who are, counterintuitively, more likely to do so. Your colleagues with chronic conditions, or with a chronically ill child or spouse, are suffering the most from underinsurance.

The “gold standard” plan that a company’s Human Resources department thinks is the industry benchmark, with the familiar insurance company logo on the ID card, may actually be bankrupting and killing workers and their families. 

My organization, Patients Rising, is a nationwide grassroots organization of patients with chronic or life-threatening conditions. We advocate for increased access and affordability in health care and have traditionally focused attention on government programs. But most of our members are covered by employer-sponsored insurance and they still struggle mightily to obtain the treatments they need at an out-of-pocket cost that they can afford.

Most business owners cringe when they hear advocacy groups talking about this problem, with the sound of a cash register ringing in their ears. They don’t need us to tell them that their plans have gotten stingier and stingier over time. They know that the rising costs of insurance are undermining their ability to pay higher wages, to offer bonuses, to invest in their company’s people and growth. For most employers, health care costs are the top expense after payroll, but unlike other expenses, companies think they are powerless to manage cost or quality when it comes to employee health benefits. 

We’ve reached a tipping point and Patients Rising is rallying behind companies that are fighting back. A small but growing number of employers have started to explore more innovative options to provide health care for their people. More and more are moving toward a model where they pay their own medical bills rather than just shifting risk to an insurance carrier. While most large firms have had this sort of arrangement (though without taking advantage of the reform potential it offers), the real surprise is that smaller firms are also fleeing to this type of model – due to creative financing options that are now offered in that market. This approach, where an insurance carrier is only used for some administrative services, if at all, rather than running the entire plan, allows for employers to take back control of their health care spend. 

Most companies haven’t used the power they have. The upstarts and innovators that we’ve tracked down are re-aligning priorities in their health plan away from price-gouging and profiteering and are instead promoting highest-value care at low or no cost for their workers. The secret super-power of health care is that better benefits are the only way for employers to lower costs. By cutting out the usual middle-men in the supply chain – big carriers, big brokerage firms, and drug middlemen known as pharmaceutical benefit managers – a partnership has emerged between employers and their workers that is setting a new standard. 

Patients Rising is launching a Health Plan Hero award program to change the conversation in the HR industry. We’ll be telling the stories of patients who got high-cost medicines for free and who avoided dangerous treatments through higher-quality care. But perhaps most surprising of all, we’ll be telling the stories of their employers who saved double digits on their health care spend, year over year. They’ve absolutely reversed a broken process that has been stealing the American Dream from Main Street businesses and the working class.  They’ve rebuilt solidarity between management and labor. These companies are truly heroes. 

Watch this space!

Terry Wilcox is the Executive Director of Patients Rising and a mom of children with chronic illness.

 

 

[1] https://www.kff.org/report-section/ehbs-2021-summary-of-findings/
[2] https://www.healthsystemtracker.org/chart-collection/cost-affect-access-care/
[3] https://www.kff.org/report-section/ehbs-2021-summary-of-findings/

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