As a small business owner, you've come to anticipate big increases in your employee medical health insurance premiums of late. Employer-sponsored health insurance premiums increased on average 11.2 percent in 2004, and this is the fourth consecutive year of double-digit growth, in line with the recent Annual Employer Health Benefits Survey released by the Kaiser Family Foundation.
That's about five times the rate of inflation nationally, and probably significantly higher compared to price increases your company has imposed on its products and services in once frame.
The reasons for these increases aren't mysterious. The greatest share of the ongoing increases track to increased utilization of advanced medical technologies - new diagnostic and preventive screenings, and other high-tech therapies and medical hardware - nearly all which are delivered at hospital on an inpatient or outpatient basis.
Prescription drugs also continue to play an important role in the rising cost of medical care, owing to the larger prices of new formulations, the wider application of combination therapies and greater consumer demand for, and need of, medications in most aspects of prevention and treatment. About the only real area that's seen relative stability is physician costs.
Such increases, when they are area of the costs of running your business, are naturally cause for concern. It only is sensible that employers who would like to continue offering their employees usage of quality healthcare become more proficient in how well their money is being spent by the healthcare carrier they choose.
For example, did you understand that virtually all carriers in Florida spend roughly the same percentage of one's premium dollars on medical claims - which works out to a medical loss ratio of 76 percent to 80 percent? They also spend a comparable percentage, 10 percent to 12 percent, on administering your plan (processing claims, providing customer support functions, covering fixed costs).
And all of the carriers element in a 2 percent profit margin. The total amount of one's premium dollars visit the commissions, which carriers pay to the independent medical insurance brokers who act as consultants. Brokers are, needless to say, a vital element in matching clients with carriers. Most business employers don't have the time or staff to determine the best package of benefits for their group, shop industry for bids and compare product offerings carefully.
They depend on the broker to explore the different options, let them have objective recommendations on the most effective choices and complete their applications. And brokers'services may often continue after enrollment. It's extremely valuable for employers to better understand where their premium dollars go. Don't hesitate to ask questions to totally recognize why one health plan may be preferred over another.
Employers can exercise some control over their costs by locating a health benefits company that provides the very best value due to their company's premium dollars. The method by which you shop a health plan can impact the price.
It's just like if your travel agent had a great deal for you - air, car, hotel and meals included. You tell your agent to book it. Coincidently, your neighbors just booked that same trip for $1,000 less through their travel agent.
One agent shopped to find the best price, one other agent arranged the trip through their vendor of choice. Whether it's a family group vacation, investing in a car or choosing a health benefits plan, the manner in which you shop can impact your cost.
Why are medical care premiums different? Take a closer look.
That's about five times the rate of inflation nationally, and probably significantly higher compared to price increases your company has imposed on its products and services in once frame.
The reasons for these increases aren't mysterious. The greatest share of the ongoing increases track to increased utilization of advanced medical technologies - new diagnostic and preventive screenings, and other high-tech therapies and medical hardware - nearly all which are delivered at hospital on an inpatient or outpatient basis.
Prescription drugs also continue to play an important role in the rising cost of medical care, owing to the larger prices of new formulations, the wider application of combination therapies and greater consumer demand for, and need of, medications in most aspects of prevention and treatment. About the only real area that's seen relative stability is physician costs.
Such increases, when they are area of the costs of running your business, are naturally cause for concern. It only is sensible that employers who would like to continue offering their employees usage of quality healthcare become more proficient in how well their money is being spent by the healthcare carrier they choose.
For example, did you understand that virtually all carriers in Florida spend roughly the same percentage of one's premium dollars on medical claims - which works out to a medical loss ratio of 76 percent to 80 percent? They also spend a comparable percentage, 10 percent to 12 percent, on administering your plan (processing claims, providing customer support functions, covering fixed costs).
And all of the carriers element in a 2 percent profit margin. The total amount of one's premium dollars visit the commissions, which carriers pay to the independent medical insurance brokers who act as consultants. Brokers are, needless to say, a vital element in matching clients with carriers. Most business employers don't have the time or staff to determine the best package of benefits for their group, shop industry for bids and compare product offerings carefully.
They depend on the broker to explore the different options, let them have objective recommendations on the most effective choices and complete their applications. And brokers'services may often continue after enrollment. It's extremely valuable for employers to better understand where their premium dollars go. Don't hesitate to ask questions to totally recognize why one health plan may be preferred over another.
Employers can exercise some control over their costs by locating a health benefits company that provides the very best value due to their company's premium dollars. The method by which you shop a health plan can impact the price.
It's just like if your travel agent had a great deal for you - air, car, hotel and meals included. You tell your agent to book it. Coincidently, your neighbors just booked that same trip for $1,000 less through their travel agent.
One agent shopped to find the best price, one other agent arranged the trip through their vendor of choice. Whether it's a family group vacation, investing in a car or choosing a health benefits plan, the manner in which you shop can impact your cost.
Why are medical care premiums different? Take a closer look.
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