Stemming the tide: Cutting insurance costs

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When it comes to small business and health insurance costs, there’s not much good news.

A family of four is paying about $18,000 out of pocket for health insurance premiums in 2018, and that’s expected to rise another 6 percent next year. The annual cost increases are unsustainably high, a trend that’s gone on for far too long. Left unchanged, the rising costs of health insurance will affect prices and production in every segment of the economy, harming long-term economic stability and unfairly harming the nation’s most vulnerable.

Experts say both market factors and poor health choices are to blame.

Analysts at PricewaterhouseCoopers say employers and health plans are improving convenience by providing consumers with more ways to receive care. In the short term, more access equals more use, driving up the cost of care.

Nationally, there’s a trend toward consolidation and merging medical practices. As bigger entities take over smaller ones, prices rise. And doctors are becoming employees of hospitals, health systems and medical groups, all of which charge higher prices than smaller practices.

The health-care needs of aging Boomers are driving up costs. And as America continues to ignore social factors that lead to poor health — things like the lack of education and economic stability — costs will continue to rise. Poor wellness and prevention habits are also factors, with 70 percent of medical costs stemming from chronic illnesses.

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The government’s to blame as well: In 2019, experts say, fewer people will have insurance thanks to the decision to eliminate individual mandates for health insurance. And the ranks of the underinsured will grow as the government permits plans to sidestep minimum requirements for coverage established under the Affordable Care Act.

So what can businesses do to curb costs?

Employers should consider offering plan options with limited networks, along with pricing transparency tools to demonstrate savings and value. And there are examples of plan options that could save businesses hundreds of thousands of dollars. It requires a mix of innovative thinking and having employers and employees share the costs. It involves an active wellness plan and incentives to stop smoking and get preventive checkups and screenings.

Want to know more? The Business Journal has convened a group of local experts to talk about the health-care environment in the United States, the regulatory environment around insurance, how high prices of insurance premiums affect care providers, and examples of how businesses are saving money.

It’s at 11 a.m. Thursday, Sept. 27, at the Garden of the Gods Collection. Panelists are Holly Kortum, executive director of operations for Southern Colorado from Kaiser Permanente; Tatiana Bailey, director of the UCCS Economic Forum; Brian Erling, CEO of Penrose-St. Francis Health Services; Cory Arcarese of Value Care Clinic in Southeast Colorado Springs; and Andrea Baldrica, senior vice president of employee benefits at Hub International.

It’s time to bend market forces, focus on long-term health choices and use the latest regulations to cut costs and save money. It’s clear that the federal government is incapable of acting on this vital business issue. Let’s find ways to solve it locally and set the example for the rest of Colorado.