As we approach the open enrollment season – the time of year when employers determine what type of healthcare options and costs they will offer their employees for the coming year – it is becoming clear that many employers are searching desperately for cost-saving measures. Employees, meanwhile, wonder openly about the ongoing affordability – or lack thereof - of basic healthcare coverage. The problem of skyrocketing healthcare and health insurance costs in the U.S. has been well-documented over the past several years. But it now seems to be reaching the breaking point for many employers and employees who are simply unable to make the financial commitment necessary to ensure that they receive quality healthcare.

While there are some alternatives available to traditional health insurance premiums, many are complex and/or leave the insured open to significant risks, should the need for extensive healthcare services unexpectedly arise. There is a great article in Sunday’s Washington Post about the Shifting of Risks and Responsibilities from Employers to Employees that gives some great examples of the new types of options that are being explored and just how bad the situation has become for both employers and employees. Amy Joyce, the author of the article, offers detailed accounts from both perspectives, which include some interesting approaches and outlooks. But the prevailing message seems to be that rising healthcare and insurance costs are beginning to overwhelm just about everyone who wishes to have quality healthcare coverage.

Having owned small businesses that have provided healthcare coverage to employees over the years, I have first-hand experience with the tremendous burden that these costs can represent. At present, with a very small firm, we are paying well over $300 per month for employees that are young and in good health. These costs are what our firm pays monthly and do not include any prescription costs, office visits, or uncovered treatment procedures that are paid directly by our employees. If you add older employees or employees with documented health issues into the equation, these costs will jump significantly. Most firms pass a large portion of the health insurance burden through to employees and, although that seems cheap or callous to many workers, doing so may make it possible to pay an employee’s salary. Often, the cost considerations are that sensitive.

I understand the employee’s perspective as well, however. I have worked in an office where I paid the majority of my healthcare coverage with pre-set deductions every paycheck. When you’re not making much money to begin with, having over $100 removed from every paycheck can really hurt. And that was just for a single man. If I had been married and/or had children at the time to include in my health insurance coverage, I probably would have been forced to take a second job or decline the insurance coverage and hope for the best. That may sound ridiculous, but I know that many people in this country are faced with that decision.

Of course, there is the truly horrifying reality that lingers throughout this discussion: If you have a life-threatening illness and significant medical expenses are required to attempt to save your life, your insurance company will drop you immediately (but they appreciate your business). If they don’t drop you, the language of their voluminous contract with you will probably preclude most of the treatments that would be most beneficial. Those expenses will fall back to the consumer of the insurance, regardless of whether you are employer or employee. Some in the insurance industry would likely refute this broad statement, but I’ve seen it happen to both family and friends over the years. In fairness, it may not always happen, but it happens often enough that I would consider it to be commonplace.

And while the rising costs and the burdens to employers and employees will dominate the headlines and generate endless debate amongst politicians and talking heads, I can’t help but wonder what the underlying problems are with our healthcare system. We often claim to have the highest quality healthcare in the world, but it would appear that very few people can afford to receive it. How is it that Canada and other developed nations are able to offer free or government-subsidized healthcare coverage for their citizens? Meanwhile, our system of healthcare places the burden of insurance coverage squarely on the shoulders of already-overtaxed employers and their employees.

Unfortunately, I don’t have the first clue about the fundamental problems that exist within our healthcare system. Depending on the day of the week, it might be the HMOs, the insurance companies, the malpractice lawyers, the politicians, the doctors, or the hospitals – or varied combinations of all of them. I know “healthcare reform” was a hot-button issue during our most recent election season, but I’m guessing that, now that elections are over, we probably won’t hear too much about it for awhile.

What will be the catalyst for true healthcare reform? I ask what will because I feel like it is inevitable that the current system is eventually going to break down. As a nation, we are rapidly reaching the point where consumers will no longer be willing to pay exorbitant fees to support our broken healthcare system. It is at this point that typically passive consumers of health insurance coverage will become more greatly agitated and demand change rather than merely ask for it.

Tags: employee benefits, employee health insurance coverage, employer healthcare contributions, healthcare costs

Share This | Posted in Workplace, Management, Economics | 2 Comments