Rising Deductibles and Premiums in Texas Drive Health Risk

08 December 2019 - Ci Magazine
rising deductibles premiums Texas - patient reading medical bill

Rising deductibles and premiums in Texas all-time high. The health insurance battle is not a new topic. Everyone wants lower premiums, deductibles, more comprehensive care, and more. With the passage of the Affordable Care Act (ACA), more people gained access to health care, and the results of the legislation are starting to become a bigger problem. According to “The Dallas Morning News,” a new study found costs of insurance premiums and deductibles reached a 13% average of employee wages. The jump reflects an increase of 7.8% from 2009, amounting to more than $8,000 per worker in premium and deductible costs. Such rising costs threaten to encourage fewer insurance enrollments and increase general health risks. The problem affects everyone, including employers and employees alike. A better understanding of the problem is essential to navigating the rising costs of health insurance.

Driving Forces Behind the Rising Insurance Costs.

Higher total costs for employer-sponsored health insurance contribute to higher deductible pricing as well. Traditional strategies for managing health costs included increasing deductible amounts. Yet, employers have maxed out their deductible increases and are avoiding further increases. Even while paying up to 79% of the total cost, deductibles and premiums continue to climb. The climb comes on the heels of wide variations between costs billed under Medicare versus those billed to private or commercial insurance.

A lack of competition also drives the rising costs. According to past studies within the Dallas report, 70% of hospital markets are “highly concentrated.” In other words, they are one of the few available hospitals for a given market, if not the sole hospital. The lack of competition leaves patients with no option for obtaining other care. As a result, hospitals increase costs to keep the doors open and balance the books. Unfortunately, this leads to the presumed subsidizing of care by those with insurance, driving premiums up simultaneously. In fact, such limited competition reflects another reason for avoiding consolidation within the health industry, particularly in private practice and specialty services, such as radiology. Less competition means health providers could theoretically increase prices again and again.

A final cause of the health care premium surge goes back to the use of health insurance benefits. As little as 5% of the insured population accounts for 50% of health spending. The reason is simple; they have chronic issues that require care to live. Unfortunately, the alternative is grim, so they must pay. Meanwhile, employees and employers face the same challenge, paying more in response. No one has the funds to avoid the issue.

How to Lessen the Burden of Health Insurance Premiums and Deductibles.

As explained by PeopleKeep, employers should follow these tips to help manage rising health insurance costs:

  1. Educate employees on the full scope of benefits under current insurance plans, ensuring they know and use all benefits, including preventive care.
  2. Implement company-sponsored wellness programs, such as group memberships to gyms, community events to raise awareness for preventive care, and more.
  3. Emphasize value-added benefits, such as dental, vision, and other forms of insurance.
  4. Consider using mail-order pharmacy benefits’ managers, notes MedlinePlus.

Of course, the tips were published before health insurance premiums spiked to current levels. Thus, employers should follow these additional steps to help employees:

  1. Encourage employees to apply for insurance through the state-specific marketplace, such as gov in Texas.
  2. Consider offering non-major medical insurance, such as Aflac, which may help pay deductibles, co-payments, and other bills when health problems arise.
  3. Explain the higher costs associated with out-of-network versus in-network health providers.
  4. Consider implementing a Health Savings Account (HAS) to offset the upfront cost of deductible payments.
  5. Work with local tax service centers to help employees understand how to count health insurance premiums and deductibles on tax documents, which may increase eligibility for subsidies when large enough.

What’s Next for the Health Insurance Market and Its Changes in 2020?

Although the current situation looks bleak, hope remains. The sharp increases in deductibles appear to be slowing. While still rising, they rose less over the past two years than the first years after passage of the ACA. Only time will truly tell how the future of health insurance premiums will influence patient decisions and employee-employer relationships. But still, everyone should take the time to think about the problem and how to use current benefits to their fullest potential. For health providers, a final simple piece of advice remains. Consolidation is an antagonist of competitive pricing and lower premiums, so it is time to start thinking of how to maintain independence, keeps costs under control, and improve the financial state of the health industry.