Health Insurance

Health care costs are spiraling out of control

Let's look at the facts. The largest expense an agency has next to payroll is medical insurance. Not only is it expensive, but it is the most sacred company benefit to employees. As all employers know, health insurance is a key part of the benefits package when hiring and retaining employees. Plan designs in our industry tend to be rich, and employer contributions tend to be high – which means that both employees and employers are caught in the cycle of ever-increasing cost.

The Healthcare Reform law (PPACA) has brought uncertainty to both the employer and the employee as to the future of healthcare and affordability. With national medical trend far outpacing GNP growth and inflation, and with company profits and employee salaries remaining relatively flat, the lopsided relationship in the numbers is frightening.

MedicalThe ugly reality in healthcare is that due to rising prices employers are being forced to adjust plan designs that ultimately reduce benefits to make the coverage "affordable". In addition, many employers now must engage in a carrier hopscotch routine in order to hold down costs, causing employee angst. Unfortunately, employers and employees are beginning to learn to brace themselves at renewal for the bad news of less benefit and more cost as the cycle spirals out of control.