Health Insurance Costs for Businesses to Rise by Most in 15 Years

https://www.wsj.com/health/healthcare/health-insurance-costs-rise-6cc1b934

by johntfella • 10 months ago

51 119 10 months ago

Imagine if businesses did not have to worry about their employee's healthcare. Instead they could focus on the business at hand. Maybe this is just a crazy idea.

duxup3• 10 months ago

What I don't see are businesses advocating for someone to take this work off their hands.

I gotta wonder how much hassle this is if it doesn't cause them to advocate for alternatives. Rather lobbying efforts and such seem to focus on other things.

vjvjvjvjghv5• 10 months ago

Businesses should get out of health insurance and also things like 401k. Give the same tax benefits to everybody. I am totally convinced that cost would go down if employees could choose health plans for their own needs instead of the employer choosing what's best for the employer.

JoshGG• 10 months ago

Crazy! Imagine if human beings did not have to worry about losing access to healthcare for themselves and their children because their company went bankrupt or they got laid off. So Crazy!

franktankbank14• 10 months ago

The craziest thing to me is paying less even accounting for insurance for simple seasonal illnesses. Do I have strep? Go to hospital and pay $400 to find out yes/no and then get prescription covered by insurance at opaquely priced pharmacy of your choice. Go to private practice pay $25 and get yes/no and then you can freelance prescription.

crawfordcomeaux6• 10 months ago

Not crazy. Caring about the business without caring about the people who literally are and empower the business is simply dehumanization.

It's been done to death. Literally.

Edit: People seem to think I'm proposing businesses keep operating how they are. I'm suggesting businesses that truly care need people running them who know how to care, not the normalized psychopathy that's become corporate culture. I'm not suggesting current or past harmful relationships with businesses continue or that even those businesses should continue.

ambicapter• 10 months ago

Should business also care about their employee's diets and fitness regimes? There are things that are outside of the purview of a business and the healthcare of their employees, outside of the direct impact of the business's work environment on the employee's health, should not be part of it.

Another way to say it, there is more to health than how an employer affects a person's life, and those things are none of the business' business.

franktankbank14• 10 months ago

Dumb take, business is "spending" 30k plus to "help out" but not allowing any choice of options to employees and an opaque choice by joyce in HR.

nradov12• 10 months ago

Crazy. The whole notion of employer sponsored health insurance is a historical accident and never made any logical sense. I don't want my employer to care about me at that level and prefer a straightforward transactional relationship.

mcs5280• 10 months ago

This is how they keep the cogs trapped in the machine

jerlam• 10 months ago

Tying health insurance (via tax benefits) to employment was a explicit decision by the US government to make people work, but it also makes people stay in worse jobs longer out of fear.

barbazoo4• 10 months ago

Someone has to pay for healthcare. If not the employer directly, then they’ll pay for it through higher wages. Are you suggesting employees stop paying for healthcare altogether?

kingnothing5• 10 months ago

The US pays more per capita for healthcare than any developed nation. We should redirect those funds to more taxes to pay for Medicare for all. Costs will go down and your healthcare will no longer be tied to your employment. As a bonus, everyone gets healthcare.

prasadjoglekar2• 10 months ago

Healthcare thru employment began as a perk for employees. Everyone else just paid out of pocket for regular care. And yes, it was priced into wages.

Even today, most people will pay several hundred dollars a month for insurance; the employer will pay several hundred dollars and the plan will still have a $2K or so deductible. That's a lot of money that most people make no use of at all.

polygotdomain3• 10 months ago

I completely agree. While it's counter intuitive, many businesses want to maintain control of employee's healthcare. Some companies look at it as a way to compete by offering better benefits than their competitors. A lot of companies like controlling healthcare because it keeps employees tied to their employer. If you temporarily lose your insurance when you switch a job, all of the sudden switching doesn't look as good. When you get to really larger companies, then they have the ability to self-insure, which means they can control the costs a hell of a lot more.

Of course, since many companies prefer less regulation, the last thing they'd want to do is hand over the keys to what they do for the healthcare for their employees over to the government. With things how they are now, they can always cut or pair back their plans if they want to cut costs. That lever would be gone with single payer.

Like many things, the system is set up to benefit those in charge rather than those who it's meant to serve. You can look just about anywhere outside the US and see that universal healthcare is a much better system, but better for who? Not much of a benefit for those who make the decisions, so we keep the flawed system we have.

TuringNYC• 10 months ago

> Some companies look at it as a way to compete by offering better benefits than their competitors.

Do they really? I've see only select hedge funds actually advertise their health plans. Even that is usually that "we pay 100% of premiums." Most plans are impossible to assess until you actually get to the job and see the tiers available and support available. The devil is in the details -- network coverage for your specific state, co-insurance, co-pays, deductibles, % premium paid, support like QoS/tier.

bko3• 10 months ago

If you think health insurance is expensive now, wait until it's free!

In all seriousness, if a private business with all the incentive in the world can't figure out how to lower healthcare costs, I don't see how punting to the government would somehow be better.

Everyone that proposes a single payer can't explain who makes less money. Will we save money by the doctors getting paid less? The drug companies? Where do these savings come from?

Even if you're able to do everything the health insurance company does and capture 100% of their margin with equal efficiency, you'll capture a profit margin of around 2-6%.

The only argument I hear is "other countries do it", which is just unpersuasive. It's not a serious argument. Propose something better

vjvjvjvjghv5• 10 months ago

"The only argument I hear is "other countries do it", which is just unpersuasive. It's not a serious argument. Propose something better"

What's unserious about this?

kingnothing5• 10 months ago

Single payer is cheaper. The US spends more per capita than any other developed nation and is not even capable of providing health care to all of its citizens.

Move to single payer, kill the medical insurance industry, and save these costs:

The health insurance industry employs approximately 605,000-912,000 people directly. The top 10 companies generate over $1.5 trillion in combined revenue annually. Conservative estimates suggest these companies spend $45-90 billion annually on employee salaries.

throwway1203853• 10 months ago

What you have is a really simplistic model of how private enterprise actually works. And what you need to understand is that economics is primarily driven by incentives, both for the individual and for the company. The only way to get different behavior out of actors in the economy is to offer different incentives, either naturally or by government fiat. Let me give you an example.

The health insurance company's bottom line profits are determined entirely by the volume of cash that they funnel to healthcare. Their profit margins are capped by law to X% of this volume. So the only way they grow year over year is to increase the amount of cash they hoover up and direct to healthcare providers. Because the stock market demands year over year growth, they are incentivized naturally and by fiat to increase the volume of cash that flows through their network. This volume of cash is directly spent on healthcare. So you can see pretty easily that the incentive structures in our society are geared toward raising costs steadily.

If you couple that with private equity buying up healthcare providers and globbing them together, then you can see that there's a whole market system being built to make healthcare more expensive so that health insurance providers can absorb more costs and therefore increase their year over year profits. PE companies increase the negotiating power with insurance companies, and costs increase. And when costs increase, the insurance company's profit increases proportionally year over year.

So what you're saying about private companies doesn't make any sense. There doesn't even have to be collusion, although United Healthcare, an insurance provider, owns Optum, a healthcare provider, and I suspect there is a lot of collusion in relationships like that. The incentives are perfectly aligned to create this situation.

FireBeyond5• 10 months ago

if a private business with all the incentive in the world can't figure out how to lower healthcare costs

Of course they can. But why on earth would they? Health insurers are mandated by law to not exceed certain profit margins, so the only/best way to make more money is not by increasing volume and lowering margin, it's by increasing costs for your target captive market. That flows down the chain, you increase the allowed costs, so providers increase to meet that (why wouldn't they?) and the only person left hurting is the policy holder (and their employer, paying some portion of it).

unpersuasive. It's not a serious argument

Your argument amounts to "this doesn't make sense, why wouldn't companies look to lower costs" when lowering costs in the health insurance mathematically equals lowering your profits.

What's not a serious argument is this constant belief that America is unique. "We're bigger than other countries", "our population density is different", all these things.

But you're going to need to do better than a pithy "it's not a serious argument" with no substance behind it when acknowledging that the entirety of the developed world hasn't "solved" healthcare but does a better job at making it equitable and accesible to more, at a lower cost, with oftentimes better outcomes (looked at our mortality rates around childbirth, lately?). It's not about the quality of care, it's about a system that revolves around making more money, not patient care. Another simple example, my insurer, Aetna, simply refuses to authorize 90-day (or rather, anything beyond 30-day) prescriptions from any pharmacy except the pharmacy they wholly own. Why? That doesn't provide patient benefit. There's no discount - the charged amount for the 90-day script is 3x the cost of the 30-day. It provides a worse experience for the patient, removing flexibility for them. It doesn't change their pharmacy network - they're still serving pharmacies all over, just for a subset of patient needs.

No, it's just about money. Again, there's near no incentive in the current US healthcare market to compete on price. And that's why US healthcare is ~20% of GDP, double, if not triple the cost of other developed nations.

polygotdomain3• 10 months ago

if a private business with all the incentive in the world can't figure out how to lower healthcare costs

What if their incentives aren't to lower cost? Insurance companies make more when the obfusicate pricing and payout less. That's the opposite of incentive, it's a way to cover up your profits.

Everyone that proposes a single payer can't explain who makes less money.

If you think the healthcare industry is just doctor-insurance-you, then you're nuts. Look up pharmacy benefit managers. They're basically third parties that are in place to jack up prices.

Even if you're able to do everything the health insurance company does and capture 100% of their margin with equal efficiency, you'll capture a profit margin of around 2-6%.

Insurance companies have had their profits capped via the ACA for more than a decade now. Where they're making their money is by using more third parties in the middle to jack up pricing and increase costs so that A) their 2-6% is bigger, and B) their "investments" in the third parties are not regulated by the ACA so they can get their massive profits their.

The only argument I hear is "other countries do it", which is just unpersuasive. It's not a serious argument. Propose something better

Its a very serious argument, you're just happy to dismiss it for some reason. If the entire developed world uses a different system than us, gets better results and for less money, then you'd have to be insane to insist that mimic those systems is not a serious alternative.

turtlebits2• 10 months ago

They don't have to, it's a perk I'm sure that many (me included) rather have their employer pay/take care of, than to do it out of pocket with higher salary.

forgotoldacc• 10 months ago

American mindset. In some countries it's just provided to everyone equally.

And no, we don't have the wait times Americans are afraid of. I can visit a doctor the same day and get treatment. My friends back in the US are desperately trying to find appointments with everything filled months down the line. America has the worst of all systems combined.

mothballed4• 10 months ago

Everyone needs healthcare, and offering the benefit is mostly untaxed, so it's just a way of offering a higher compensation than the competition that doesn't. End result is most every professional full time job offers it, because taxed can't compete with untaxed.

franktankbank14• 10 months ago

You've explained the current situation without acknowledging any of its downsides, good job.

latchkey• 10 months ago

I don't worry about it. I just pay it 100% for my employees.

nradov12• 10 months ago

If something is unsustainable then eventually it will stop. US healthcare costs have been increasing at faster than the rate of inflation to the extent that it now consumes about 18% of GDP. The majority of people are on employer sponsored group health plans and employers have absorbed most of the cost increases but they're reaching a breaking point. I predict that more employers will simply drop medical benefits and choose to pay the penalty instead, forcing employees to purchase their own health plans on state ACA exchanges.

https://www.kff.org/affordable-care-act/employer-responsibil...

glimshe• 10 months ago

I'd prefer that if it was replaced by a system where the business pays/subsidizes YOUR ACA plan. Changing health plans when you change jobs is a huge headache.

franktankbank14• 10 months ago

I'd prefer it be unrelated and they can just pay me a fucking salary without deducting several tens-of-thousands "for my benefit".

cryzinger• 10 months ago

On the face of it, +1 and yes please, but only if we also see a push to get more/better ACA plans on the market. In some states the pickings are quite slim; last time I browsed ACA plans there were no PPO plans, for example.

I would also accept Medicare For All if we're shooting big here :)

cpburns2009• 10 months ago

A better solution to untie employment from health insurance would be to make premiums tax deductible. That way you would no longer be financially penalized for opting out of employer provided coverage. The cost would be no different than the pre-tax dollars the employer used to pay.

throwway1203853• 10 months ago

That would be awesome, especially if we could get rid of the yearly Open Enrollment period. We could finally dump insurance providers that don't provide good service or who have bad networks without having to change jobs.

mrguyorama3• 10 months ago

And in the years it would take for a new system to shake out of this disruption and chaos, most people would be unable to access healthcare for basically anything.

Isn't that just great?

I too would love to disconnect healthcare from employment, but good god is this the wrong way to do it. But the current administration has shown for over 20 years that it is utterly incapable of building a solution, so they will just keep tearing down what little of this system is effective while pocketing billions.

coredog642• 10 months ago

I can't speak to smaller employers who actually use the insurance capability, but larger employers (e.g. 500+ employees) are almost certainly self-insured. They bring the money for the loss pool and use the insurance company for claims service and network.

On it's face it might seem like this isn't related to your complaint, but one of the consequences of self-insurance is that the employer essentially has a dial that they can turn that influences what level of service you get from the provider. If the pool is okay, then your employer might spring for additional benefits like free telehealth. If the pool is marginal, they might force you into a pharmacy plan. And if the pool is completely hosed, then the provider can get aggressive about requiring documentation to bring pool spend back in line.

vjvjvjvjghv5• 10 months ago

"employers have absorbed most of the cost increases "

Health insurance is part of the total compensation so it's employees who have absorbed the cost by lower salary and higher deductibles, co-pays and whatever other ways insurers find to reduce their own cost.

trashface• 10 months ago

ACA plans are going up even more on average than employer based plans, at the same time subsidies are being reduced.

The ACA exchanges are possibly doomed long term. People on that skew mid to lower income (but higher than medicaid), and many won't be able to afford the higher premiums - so they will drop off. So then there is the death spiral situation.

franktankbank14• 10 months ago

That's the insurers putting their finger on the scale so they can hold out for their employment health insurance scam.

estimator72922• 10 months ago

That thinking only applies to non-essential markets. The whole reason we're in this mess is that insurers (and government/lobbyists) realized that people will never stop getting sick or hurt and that people will pay literally anything for medical care because the alternative is gruesome, horrifying, painful death.

The market simply cannot correct for this. It's just not possible. As fewer people can afford care, prices will go up to offset lost profit. The only organic correction that can happen is if so many people die that the entire economy collapses.

So yes, we'll see a decrease in hiring, a decrease in the number of insured and/or healthy workers, and absolutely nothing will change. The public simply cannot squeeze insurance into lowering prices, nor can businesses. Only legislation can fix this problem.

But since that seems to be ever more unlikely, the best solution is probably for the people to storm the insurance companies and put the CEOs on pikes for all of the death and destruction they've inflicted on our entire society. Democracy has utterly failed us and the only reasonable option left is incredible violence. That's the sad, sorry state that american society is left in today.

nradov12• 10 months ago

Commercial health plans already have very low profit margins, enforced by the ACA minimum medical loss ratio and competitive pressures. There's nothing much to squeeze there. If you analyze the actual cashflows, most of the money is ultimately going to things like provider wages, facilities operations, prescription drugs, and medical devices. Regardless of whether bills are paid by employers, consumers, or government, any attempt to reduce overall healthcare system costs will have to focus on those areas.

And it's horrifying that you would advocate for violence on this issue so I flagged your comment.

doctorpangloss4• 10 months ago

Okay, and how much did insurers pay back in rebates to companies large enough to have their own pools? Assuredly that has also grown.

People in this thread ask why don’t businesses lobby for public health. Wrong: why doesn’t Apple lobby for public health? Follow the money. It’s so naive to think it’s solely about providers. Who anyways, when there is fraud, they are defrauding CMS, not UNH.

nradov12• 10 months ago

Huh? What rebates do you mean? Most large employers like Apple are already self funded and the health plans merely act as third-party administrators, assembling networks and processing transactions. The ACA does include a minimum medical loss ratio so health plans that come in under the limit are forced to issue premium refunds to customers.

There is plenty of waste, fraud, and abuse committed by providers against all payers including Medicare, Medicaid, and commercial health plans. Most providers are honest and follow the rules in good faith but there are a few bad apples who attempt to exploit all payers.

vjvjvjvjghv5• 10 months ago

"The ACA does include a minimum medical loss ratio so health plans that come in under the limit are forced to issue premium refunds to customers."

The loss ratio seems to be a good incentive for insurance to pay more to hospitals in order toincrease their own cut of the premiums they are taking in.

doctorpangloss4• 10 months ago

Most large employers like Apple are already self funded and the health plans merely act as third-party administrators, assembling networks and processing transactions.

Ha ha, “merely act as third-party administrators.” Dude, does United Health or Apple deny your claims?

Anyway, it’s a simple question. Why doesn’t Apple lobby for public health?

Der_Einzige• 10 months ago

Want this to stop? Make GLP-1 available on every street corner and get the majority of Americans who are overweight or obese to start taking it en mass.

One of the few things I'm happy about republicans being in power for is the current grey market situation with GLP-1s. I have a feeling that a democratic FDA would try to come down hard on the current situation. Rich people and girls who are pissed at their body know how easy it is to get these drugs with no oversight. Thank god for it and may it never get harder to access these substances.

barbazoo4• 10 months ago

What a sad state of affairs. That’s what giving up looks like in my opinion. Which is fine but that’s what it is.

franktankbank14• 10 months ago

Wildly myopic pump of glp-1 stock

RationPhantoms• 10 months ago

GLP-1 will help but not completely solve the current obesity epidemic. My source is me being more than 6 month long durations, at maximum dosage, of both semaglutide and tirzepatide. While it's resulted in a solid amount, there is a cap to what it can do where diet/exercise have to take over.

rimbo789• 10 months ago

Nationalize health care. All health care should be owned by the state and operated not for profit.

The profit motive and health care outcomes are fundamentally at odds.

franktankbank14• 10 months ago

Nationalize health insurance maybe as a start.

estimator72922• 10 months ago

No, also nationalize for-profit hospitals which prioritize ten cents in profit over a person's actual life.

UtopiaPunk2• 10 months ago

Medicare For All, as put forward by Bernie Sanders, would do this. It basically just expands the existing Medicare structure to cover everyone.

fair_enough• 10 months ago

The whole idea of making employer-sponsored health insurance tax-free but not out of pocket medical expenses is a problem in need of fixing. As things currently stand, you can only write off medical expenses that exceed 7.5% if your adjusted gross income, and only if you use itemized deductions rather than the standard deduction.

This public-private healthcare system as it currently exists in America combines glacially-slow subpar public services with the rent-seeking behavior of private insurance.

More than any other group, it screws small business owners, i.e. the people the politicians usually claim to run for office on behalf of.

Pwntastic• 10 months ago

https://archive.is/WvHZo

UtopiaPunk2• 10 months ago

The USA really needs to implement Medicare For All or a similar plan. The amount of bureacracy that would be simplified or just go away is staggering. The savings would be huge. Getting healthcare would be easier not just for patients but for doctors as well! Doctors' primary concern is providing the best treatment for their patients, but they usually have no idea how much such treatment would cost. Patients often don't know if they'll be totally covered or if they'll be financially ruined until they make a separate phone call to some customer support rep (who also probably doesn't really know). It's nuts. Under a Medicare For All system, coverage would be standardized for everyone, and doctors would have much better understandings of whether an MRI or X drug would be covered or not.

Likewise, employers won't have to carry this burden. Companies that hire employees across multiple states have to navigate a patchwork of state/region based health insurance policies. Whenever there is a wrinkle in health insurance paperwork, an HR person has to to hunt down the issue and coordinate between an employee and the health insurance.

My gosh. I switched employers within a month of having a major medical event, and it was just the worst. The hospital was claiming I didn't have insurance, but I did (through COBRA, which is a whole other shit show that should and would go away), so I had to have multiple phone calls with the HR dept of the employer that I had just left. It's pretty awkward!

How often do we get to say that the government option reduces bureacracy.

That's not to mention the increasing potential for innovation! I know personally I left a fulfilling but somewhat unstable freelance lifestyle to get a job that offers health insurance after I had kids. I would like to pursue something else independently, and I can tolerate the financial risks, but I simply cannot tolerate the high costs of health insurance for myself and the rest of my family (or worse, the risks that come with having no insurance at all). If my family had health insurance, I'd leave my day job and chase other more exciting, fulfilling prospects. If that was a successful venture, maybe I could afford to hire a few employees because I wouldn't have to cover their health insurance.

Medicare For All should be a slam dunk. The only thing standing in the way is the health insurance industry, which is rolling in money. Get rid of them.

swed420• 10 months ago

It was surreal to see the lengths that bought corpo Dems and their media went to sink the Bernie Sanders campaigns twice, making it extremely clear they preferred Trump over Bernie.

The whole system is broken. It's overdue to launch our own publicly owned instance of what they built in Taiwan to sidestep political gridlock:

https://www.theguardian.com/world/article/2024/aug/17/audrey...

https://www.plurality.net/

1vuio0pswjnm7• 10 months ago

Works when/where archive.is is unavailable:

https://www.msn.com/en-us/money/insurance/health-insurance-c...

Text-only, no Javascript:

https://assets.msn.com/content/view/v2/Detail/en-in/AA1Mg1Fv...

josefritzishere• 10 months ago

The Medicare-for-all solution increasingly seems to be the most economical.

amirmi78• 10 months ago

I wonder why people focus so much on insurance companies, given their relatively small profit margins. The more glaring issue seems to be provider costs, which are several times higher than comparable services in other countries, with little variance. Are we suffering from a shortage of medical schools? Or from a lack of competition among medical device manufacturers?

Health Insurance Costs for Businesses to Rise by Most in 15 Years

Related Stories