Here’s Why You Should Review Your Health Plan In 2021!

I’m sure you, like everyone else is ready to have 2020 come to an end – what a year on so many fronts! It’s been a difficult year for me to garner people’s attention to consider health plan changes in 2020 as well – but some actually have. I realize that most people in business have other issues to attend to, and healthcare and health insurance are not front-burner issues this year. However, they probably will be in 2021 and here’s why:

Several months ago the American Hospital Association stated that by the end of 2020 the expected losses for hospitals throughout the country will exceed $340 billion. This is largely due to the postponement of nonessential or elective surgeries and procedures, testing, and imaging because of the pandemic and all of the related issues that we thought our hospitals are going to have. There’s only one way to make up for these losses and it’s called INCREASED PRICES.

Hospitals can raise prices anytime they want – there are no laws, no rules, no regulations of any kind that prohibit price increases. Rest assured, they will be going up in 2021 which leads to increase claim costs, increased utilization, which in turn increases health insurance costs and premiums.

I don’t know if you were able to watch 60 Minutes this past Sunday, but they had a segment about hospital price gouging and shenanigans. Here is a link if you’d like to review it:

https://www.cbsnews.com/news/california-sutter-health-hospital-chain-high-prices-lawsuit-60-minutes-2020-12-13/

Specialty Drugs continue to be an ever-increasing cost for health plans. As you have read in some of my prior articles these costs far exceed those of serious medical conditions, not to mention the cost of the medical condition as well. As you have probably seen within your own member population, more of these are being prescribed by physicians, with members having very little financial “skin in the game” for employees and their dependents. In other words, they have no reason to ask their physician for different drug.

Just to give you an idea of a few of my clients’ costs – those who have taken control and charge of their health plans – here is a sampling per employee per year costs. By the way, Statistica 2020 states that the per employee per year cost for employers in 2020 is projected to be $13,728 nationally.

  • Employer A: $5,079
  • Employer B: $7,359
  • Employer C: $4,752
  • Employer D: $6,866
  • Employer E: $4,340
  • Employer F: $7,732

I think you get the idea. I even have one client that actually has their cost at $1,752 per employee per year – unbelievable!

Between the increasing charges from hospitals and increased utilization by those members who postponed their procedures, and increased specialty drug prescriptions, some prognosticators think that 2021 will be one of the highest cost years and highest increases in recent history.

If your plan happens to be fully insured, most states allow for an early termination with a 30-day notice to the insurance company – you don’t have to gut it out until the end of your policy year. All of your members also get full credit for any deductibles or out-of-pocket expenses that they may have had year to date, and you don’t have to change benefits for employees.

If your plan is partially self-funded, you too can change administrators and programs at any time to garner maximum savings, while preserving or even increasing your current plan of benefits.

There are plenty of options out there, the question is whether or not you’ll take advantage of them and reduce one of your highest expenses on your P&L. If you’d like to learn more, call me at (970) 349–7707 or email me at frank.stichter@strategichpc.com. I have a 30-minute slide show that I can present to you on Zoom that can show you how much you could save – hit me up!

Happy Holidays to all and to a prosperous 2021!

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Strategic Healthplan Consulting LLC

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