Healthcare costs are on the rise again in 2024, and consequently, so are healthcare insurance premiums. Costs for employers are expected to grow by 8.5% this year to more than $15,000 per employee. Many factors are driving up the cost of employer-provided coverage, including rising demand for medical services, the availability of new treatments, and a dramatic rise in prescription drug prices. These factors together with the weakening of managed care and the consolidation of insurers will continue to put pressure on prices going forward.

It’s no surprise that the cost of healthcare benefits is increasingly out of reach for many small and midsize employers. That’s especially problematic because an appealing benefit package has become vital for attracting and retaining talent. The problem begs for a nontraditional solution and employers are likely looking to their PEO or broker for a solution.

Combat rising costs with nontraditional healthcare options

We’ve curated five nontraditional healthcare options that are affordably priced and require no employer contributions. They include a range of basic and robust Minimum Essential Coverage (MEC) plans and Minimum Value Plans (MVP). All have zero-deductible with additional deductible options to lower cost, co-payment plans that encourage employees to spend their healthcare dollars wisely and make smart use of their tax-advantaged Health Savings Accounts and Flexible Spending Accounts.

Individual Health Plans not only meet your clients’ immediate needs for more affordable coverage. They also provide a long-term solution to the continuing challenge of medical inflation and unpredictable increases in healthcare insurance.

Why healthcare costs are rising

The increased costs your clients have experienced over the past decade are projected to continue and even intensify. The cost of services and insurance is being impacted by:

An aging demographic

Right now, the American population is older than it’s ever been, but in the coming decades, the percentage of Americans over age 65 is expected to be even higher due to increasing life expectancy and declining birth rates. An aging population uses more medical resources and pharmaceuticals to treat chronic disease, which results in more health care spending.

Rising prescription drug costs

Prescription drug costs represent an increasing large portion of healthcare expenditures. In the U.S., pharmaceutical companies set their own prices. There are no government-imposed price caps and no single payer to negotiate pricing. In addition, many drugs have recently been introduced that are still under patent. Patents limit competition for as long as 20 years and keep drug prices artificially high.

Further consolidation of the insurance industry

As big health insurers buy smaller ones, there’s less competition and, therefore, less motivation to keep premiums low. Insurers that previously slashed prices to gain market share are now focused on profits and passing along a greater share of costs to consumers.

Weakening of the managed care system

Managed care companies once relied on defined networks of physicians and hospitals to keep costs down, but patients wanted greater freedom of choice in selecting providers. Networks have been broadened and will continue to widen, resulting in higher costs.

Growing consumer awareness and demand

Due to healthcare advertising and consumer healthcare journalism, Americans are increasingly aware of their options for preventive screening, diagnostic testing, immunizations, surgical procedures, and pharmaceutical treatment. As a result, the demand for services and medication is increasing rapidly. Demand is projected to grow further as new, high-priced pharmaceuticals come to market, and advancements in medicine provide expensive treatment options that are potentially more effective for neurological diseases, cancer, and other serious conditions.

Why affordable solutions are so important right now

As costs continue to climb, there’s no better time than now to introduce your clients to an affordable healthcare option that meets their employees’ needs. Our seven MEC and MVP benefit plans are designed to be inexpensive, easy to administer, and flexible.

Notably:

• No employer contributions are required.
• All MEC plans are copay-driven. MVP plans offer ZERO and $2,500 deductibles.
• Participants can use any doctor or hospital, both in- and out-of-network.
• Unlimited telemedicine is included.
• Plans complement existing tax-advantaged Health Savings Accounts and Flexible Spending Accounts.
• Employers with as few as five participants are eligible.

Need help? We have you covered.

Help employers control healthcare insurance costs with proven strategies and affordable products from USRBP. To learn more, contact [email protected].