Health Plans Building Blocks

Why your health plan (and Employees) can’t afford NOT to have this solution

Monday, October 21, 2019
Blog

Over the past decade, health insurance plans have become increasingly more complex. Much of this is due to the rise in health insurance premiums, triggering a rapid escalation in deductibles, copays, coinsurance, and out-of-pocket maximums.

In a recent study conducted by Policy Genius, only 4% of Americans could define all four of these terms. For reference, roughly 12% of Americans work in the healthcare industry. This isn’t even getting into the complexities of Health Savings Accounts (HSA), Health Reimbursement Accounts (HRA) or Flexible Spending Accounts (FSA).

One of the familiar battle cries from brokers and advisers is for increased Employee exposure so that they have “skin in the game.” The thought process being that with greater exposure, they will behave more as a consumer when it comes to healthcare choices – even perhaps intentionally seeking out lower-cost care alternatives.

These items are out of alignment. How can we expect someone who does not understand what a deductible is to navigate their health care choices and find a provider to mitigate this exposure, in an environment where costs are opaque at best?

Modern-day health advocacy solutions can help. A robust advocacy solution helps to achieve the following:

  • Real-time and on-the-go member education. This means the opportunity not only to redefine a term like “deductible” but also convey the financial impact.
  • Navigation. We are going beyond just knowing how to find a directory of doctors on the insurer’s website and instead to the lengths of directing patients to high quality, and low-cost providers for nearly any healthcare need.
  • Post-Service Support. Today it is estimated that 80-90% of hospital bills, especially those over $10,000 in charges, are incorrect. A single visit may result in several invoices from several providers, seldom with a guarantee that all are in-network. This means that consumers may end up with surprise bills, also known as balance bills. In the absence of legislation against surprise bills, advocates can also help to negotiate and even resolve these items as well.

What if I don’t have a complicated high-deductible health plan (HDHP) or consumer-driven health plan (CDHP) for Employees? Then there is all the more reason to consider advocacy.

If your health plan is part of the minority that doesn’t include a deductible, this means that
uninformed decisions cost your company more-so than Employees.

Let’s take, for example, a simple MRI in the case below:

MRI Facility

MRI Cost

Employee Copay

Health Plan Cost

A

$3,000

$250

$2,750

B

$1,500

$250

$1,250

C

$500

$250

$250

In the above example, the Employer could spend as much as $2,500 more at Facility A over Facility C. Even with a basic advocacy solution, assuming $2.50 per employee per month,
avoiding just one MRI at Facility A would cover 1,000 member months (IE: 100 Employees for 10 months, or 25 Employees for 40 months).

Better yet, imagine the impact of this choice on a member’s wallet, should they have a $3,000+ deductible on their health plan. It’s a quick and easy way to deplete a Health Savings Account.

In case you are wondering how many MRI’s cost $2,500, it’s close to the national average cost of $2,600 as researched by Nerd Wallet in this article.

There are other benefits to launching an advocacy solution as well:

  1. Consistency from a service perspective, even if changing insurers year-in and year-out
  2. The ability to change member behavior to desired consumer behaviors
  3. Alleviating workload from the HR & Benefits team
  4. And more.

This balance between “Copays and Consequences” can help an Employee be a consumer when they are placed in the shoes of being a patient. By providing plenty of insight around the consequences, and the constant reminders about an Employer-sponsored advocacy solution, Employees will be far more likely to engage.

A strong advocacy solution will not only hand you the keys but also help to drive engagement. This is much to the relief of HR from having to manage yet another Employee program. Here are some other links that you may enjoy:

Blog:
Improving health care value by pausing and asking questions.

Podcast:
Podcast: Improving Health Care Value by Pausing and Asking Questions, With Derek Winn, Cofounder at Distilled Concepts and Consultant at the Business Benefits Group

No cute ideas, only
distilled concepts.

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