Healthcare Costs Can Make You Sick
I know it’s almost a month away, but I am already dreading June 1. That’s the date that Marcum’s health insurance contract renews annually, and every year I’m dumbfounded by how much our health insurance premiums are increasing. This year is no exception. We just finished our annual review process and, needless to say, I’m not happy.
In an almost zero-inflation environment, our health insurance cost, before plan modifications and employee contributions, will be going up by 15%. Fifteen percent!
I know we’re not the only company going through this, but it staggers me, nonetheless. And it seems no matter what we do, prices just keep going up, year after year, with very little recourse for businesses like ours. I’m sure many of you feel the same way.
Since 2008 when the current economic slowdown started, we have had to absorb exorbitant increases in our healthcare costs without the luxury of adjusting our fee structure to compensate. We continue to incentivize our staff with annual raises (although not as much as they might like) and to closely manage our other operating costs in order to stay competitive and profitable. The one thing we can’t seem to control or do anything meaningful about is the ever-rising cost of healthcare.
We have a large firm with close to 1,100 people, most of whom participate in our medical plan. We have tremendous diversity in geography, ethnicity and age. We have a “white collar” work force that is well educated and has a very low on-the-job health risk. You might think that all this would combine to reduce our rates, not raise them. You would be wrong. In a workforce of our size and diversity, we have our fair share of babies every year; a handful of serious and even fatal illnesses; wellcare and sickness-related doctor visits; and people on every kind of medication, from antibiotics to antidepressants. All of this contributes to our experience and therefore sets our premiums.
And lest you think otherwise, we’ve spent a lot of time working with our benefits consultant, BWD Group, to explore our options (for those of you who need a recommendation, they are first rate). But even after a thorough review of our plan design, we are still faced with a 15% increase. Where will it stop?
What I’ve come to conclude is that our health insurance costs are going to continue to be exactly what our insured population is consuming in healthcare dollars, plus an administrative fee and profit to the insurance company supplying the healthcare provider network we choose to use. We really don’t have insurance at all. What we have is a health insurance plan that administers and processes our claims, and levels out the monthly cash flow for us. There is no sign this is going to change any time soon.
The years of kidding ourselves that the cost of healthcare is someone else’s cost are just over. Someway, somehow, we are all going to pay our own cost of healthcare, whether it’s through insurance premiums, government taxes or out-of-pocket dollars.
The only way we can curtail our healthcare costs is by being healthier. We all have to start making healthier choices and leading healthier lives, particularly with regard to those health issues over which we can have some influence, such as obesity, heart disease, certain cancers, diabetes and others. We all need to focus on our own individual and family wellness in order to arrest the escalation of healthcare costs that is putting such a significant financial strain on our country. It’s the only solution.
The good news is that Americans as a whole are living longer. The bad news is that the cost of caring for us in our older years will continue to increase. The healthier we are now, the less it will cost to keep us that way, and the better off we will all be in the long run.