The long upward trend of health insurance costs throughout the United States shows no sign of slowing anytime soon.
Despite the U.S. spending more on healthcare than at any time in its history — up to 18% of GDP currently — uncertainty is at its most prevalent throughout workforces across the country. As the landscape of healthcare options from employer-provided plans to the Affordable Care Act (ACA) offers respite, the need for sustainable health insurance is as imperative as ever.
“With the passage of the ACA in 2010, many people did not understand the wealth of new benefits available for the uninsured and small businesses,” said Chadrick Kennedy, president of Health & Wealth Consultants (HAWC) on St. Charles Avenue. “Today, small businesses have access to more innovative products than ever to help mitigate costs. The more educated business owners are about these options, the better they can advocate for their employees and provide attractive coverage.”
For economists like Michael Bertaut, healthcare economist and exchange coordinator for Blue Cross and Blue Shield of Louisiana, the fluctuations in the healthcare market are unsurprising, offering both opportunity and constrictions.
“In states like Louisiana, one of the poorest in the nation, employers need to offer strong healthcare benefits to attract top talent,” he said. “Today is, undoubtedly, the easiest time in our lifetimes to get coverage and stay covered, although that coverage is in no sense cheap.”
General inflation makes the constant struggle to stay above the onslaught of costs an exhaustive, day-to-day challenge, leaving many employers frustrated and hopeless. Kevin Gardner, senior vice president of HUB International Gulf South, has monitored these trends over a 40-year career and, while acknowledging the unsustainability of these economic forces, is hopeful in the continuing fight.
“People are worn out because the problem with healthcare costs has grown beyond normal inflation to become unmanageable,” said Gardner. Property/homeowners rates and healthcare costs are not improving and are particularly challenging in South Louisiana. But there is hope as employers are taking a more aggressive stance on how they manage their plans.”
Changing How Money Is Spent
Thankfully, employers do have a fair amount of flexibility in what benefits they offer and how they offer them. To that end, many Louisiana employers have opted to utilize a higher percentage of their costs to cover employees as opposed to their own dependents, a generous and profitable redistribution of benefits.
“Five years ago, this wasn’t an option,” noted Bertaut, “but now you have the option to give less of a percentage of the total premium while retaining the same dollar amount to your family coverage and increasing that percentage for employees. Additionally, up until 2021, the IRS said that if one spouse got a good offer from an employer and the family got any kind of offer, those folks were locked out of healthcare.gov. That is no longer the case. Employers who do this in an organized way can consistently provide more affordable coverage.”
Examining All the Plan Options
In Louisiana, a state predominantly made up of small businesses, these smaller employers are also beginning to move to partially self-funded plans, allowing for more creativity than being fully insured. By narrowing the scope of their coverage and limiting the provider options to Ochsner or the LCMC health systems, employers can reduce costs across the healthcare spectrum, including currently skyrocketing pharmacy costs.
“Partial or fully self-funding allows you to be more strategic in your network for how your employees access care,” said Gardner. “To reduce costs, you might have to accept some changes in choices to counteract improvement on the plan itself. This same approach goes for pharmacy costs. You used to be able to get any drug you wanted on any plan, but now you might have to get a particular drug. This makes things more difficult for the doctor but removes costs while retaining coverage.”
Keeping People Well
Despite the increase in costs, however, the overall health of employees has begun to improve in large part due to the recent trend of company-wide wellness initiatives. By investing in programs that engage employees in a culture of health, employers can reduce costs through less frequent doctor visits and the maintenance of healthy lifestyles.
“By creating an environment where health is at the forefront, small business owners are able to profit from the improved health of their people,” said Kennedy. “When employers spend money to increase the quality of life for employees, costs invariably go down. It’s a true win/win.”
Jeremy Marshall was born and raised in Baton Rouge before moving to New Orleans with his wife, Kristin, in 2018. Beginning his career in the film/TV industry, Marshall worked steadily on over a dozen projects before transitioning to Renaissance Publishing as sponsored content coordinator. He may be reached via email at jeremy@myneworleans.com.
