How To Stop Rising Premiums
What if I told you you’re not powerless against rising health care premiums?
Last week we finalized the details for a local municipality who was facing a 17% increase in premiums. Although their annual premiums were about $310,000 per year, they had no access to the information regarding the actual cost of what basic services their group was using. They have always just gone to an insurance agent to obtain premium quotes from a few other insurance companies. What they never did was to compare the actual cost of medical and pharmaceutical services used versus the premiums they were paying into the fund. As we like to say, “if you want a quote, go to Shakespeare; if you want results, go to ECCHIC.”
Instead of calling a typical insurgence agent, they reached out to us. Our advocacy and recommendation to them was to implement a defined method and strategy to change this dynamic. Therefore we are helping them to unbundle these costs, eliminate as many middlemen as much as possible, and realize once and for all effective cost efficiency by knowing where their money is going.
One of the components of our pro-active health care management team is educating business owners about Pharmacy Benefit Managers (PBMs). One aspect of this paradigm shift in approaching health care cost is one we particularly enjoy: A key component is rather than send money out of town to a PBM, we can get companies to work directly with an independent pharmacy that is in their town (in this case, it was five minutes from where they worked!). We are in the process of setting up their drug benefit directly with this local community based resource and making their local pharmacy an approved preferred provider where the employees receive a better benefit with lower co-pays and no deductible. Now the employer’s plan has lower costs for the drugs and the local pharmacy will have more business, get paid faster, and enjoy a guaranteed locked-in clientele who happen to also be their neighbors. The employer-sponsored group will now have a pharmacy professional helping to guide and advise their plan instead of an insurance company or insurance agent whole knowledge of the intricacies of the drug system isn’t close to that of a professional pharmacy. This enriches the local community as a whole, and achieving this makes us proud.
Meanwhile, medical services will be contracted directly to an already established medical network so the cost of medical services will be at the institutionally-contracted discounted levels instead of marked up premium levels. This will reduce the cost of medical services from the premium price to the negotiated discounted true medical cost which in this case is approximately 30% to 40% lower than their previous plan. There will be an umbrella major medical policy to protect against the unknown, and a contracted professional independent administrator to handle the paperwork whose actual cost as a direct identified contracted cost is about 40% less than what is blindly bundled, inflated and hidden in premiums.
These are cost-saving “tricks” big companies take advantage of, but any business can take advantage of it – if you’re willing to take a different approach. You’ve got nothing to lose and everything to gain; specifically, stopping the madness that is ever-increasing insurance costs.