Despite the fact that the PPACA is meant to lower healthcare costs, a new report from TransUnion Healthcareshows that consumer out-of-pocket expenses have actually increased 11% from 2013 to 2014, while at the same time deductibles have risen by 7% and revolving credit has declined. Specifically, according to TransUnion the ratio of revolving credit to healthcare costs has decreased from 15.2:1 in 2013 to 13.5:1 in 2014, but out-of-pocket expenses have increased by almost $250 (from $2245 to $2491). This means that consumers have less money available to pay for ever-increasing healthcare costs.
Adding to that burden, a recent Wall Street Journal blog from Drew Altman, president and CEO of the Kaiser Family Foundation, reports that there is a steadily widening gap between wage growth and employee-costs for healthcare premiums and deductibles. Specifically, since 2006 wages have increased by 23% while healthcare deductible costs have increased by 108%. This comes at a time when many employers are adopting high-deductible plans for employees in an effort to offset costs and shift more responsibility to the consumer. Altman says, “ultimately, employers need better ways to control health-care costs.”
Luckily there is a way businesses can both control healthcare expenses and reduce the out-of-pocket burdens on their employees. Self-funding (or partially self-funding) group healthcare is an option that many businesses, both large and small, are seriously considering as a win-win for both the employer and the employee. Self-funding allows organizations to finance their own group health plans and pay for costs as they are incurred. This could result in a savings of up to 12% for the company. On the employee side, all out-of-pocket expenses are typically covered through an employee-reimbursement account. At the end of the day, companies save money and are more in tune with their staff’s healthcare needs, and employees receive high-quality care at a minimal cost.
For more information about self-funded and partially self-funded healthcare, and to explore your options,contact us.
