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4 Things Employees Can Do To Avoid Extra Health Premium Costs

(5-7 minute read)

The desire for health insurance has not waned over time. According to U.S. News & World Report, “most consumers want and value health insurance…” however, many of them cannot afford coverage. Those fortunate to have coverage under an employer group plan must still deal with the issue of cost.

PwC’s Health Research Institute (HRI) indicates that for four years medical costs have grown between six and seven percent, a trend that’s starting to seem like the “new normal.” For 2018, an increase of 6.5 percent is anticipated—after making changes to their 2018 benefit plan design, such as changes in copays and network size, employers can expect the growth rate to drop to 5.5 percent.

Employers have a choice: absorb the increase or pass it on, fully or partially, to employees participating in the health insurance plan. The latter happens more frequently than we may imagine. PwC’s HRI asserts that from 2011 to 2016, health insurance premium for employer-sponsored family coverage jumped 20 percent, while wages increased only 11 percent during that same period—impairing employees’ ability to pay for other goods and services, such as food, shelter and transportation.

Employees have a direct stake in their employer’s group health plan, so they will likely consider ways to avoid big premium hikes.

Reducing Emergency Room Visits

Hospital emergency rooms provide convenient access to medical care after-hours, however there is a concern among industry experts that emergency departments are being overused by patients with non-emergencies.

The Centers for Disease and Control Prevention estimated that just over half of all patients admitted to the emergency room need to be seen within an hour. Further research shows that 76 percent of commercially insured patients who visited the emergency room did not have emergencies, or the visit could have been prevented with timely outpatient care.

Visiting the emergency room—when going to a primary care physician would have sufficed—costs an extra $580 per visit. Consumers can help thwart this additional cost by visiting their primary care physician or an urgent care clinic for non-emergencies.

Telemedicine Access

The Society for Human Resource Management (SHRM) states that virtual doctor visits “are a trending health care savings strategy.” In 2016, nearly one quarter of employers offered virtual medical services, or telemedicine access, which lets plan participants connect with a health care provider via phone or videoconferencing to obtain a diagnosis or treatment. Telemedicine is typically less expensive and more convenient than making a trip to the doctor’s office. Therefore, employers who offer this service should make employers aware of its availability and benefits.

Shop Around for Lower Prices

A 2016 survey by SHRM concluded that consumer-directed health plans (CDHPs) are a popular cost-cutting tool for employers. A CDHP is a high-deductible plan that is combined with a health savings account or health reimbursement arrangement, designed to get employees to become more responsible for the medical choices that they make. While the employee usually pays a lower monthly premium, he or she pays more for his or her health care costs before the insurance begins to pay its portion.

Employees can avoid paying more out of pocket by taking the time to research and compare costs for non-emergency services like surgeries and tests, especially since costs may differ greatly by provider, even among those in the same city. Many health insurance companies offer information on their website, stating where participants can obtain in-network services. Some health insurance companies also offer tools for determining the price of certain services—such as knee surgery or MRI—per provider. Employers should make employees aware of these resources if they exist.

Tiered Drug Plan

Some insurance companies structure their prescription drug plans into “tiers.” For example:

  1. Tier 1—includes only generic drugs and cost only a small amount in copay
  2. Tier 2—includes preferred brand-name drugs; copay is higher than for Tier 1 drugs
  3. Tier 3—includes non-preferred brand-name drugs; copay is more than Tier 1 and 2
  4. Tier 4—includes specialty drugs, used to treat serious or rare illnesses; comes with the highest copay.

Drug tiers impact how much the insured pays. Typically, the tier with the richest benefits has the most effect on the cost of the plan. Therefore, employees with tiered drug options should understand how their health insurance plan works so they can make prudent medical and financial choices.




November 29, 2018




Article Competitive HR Professionals Over 50 Employees

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