Healthcare costs are straining businesses and individuals, making short-term and long-term healthcare difficult to afford. Many consumers do not visit their healthcare professionals as often as they should because they fear the final cost of even simple procedures.
Those of us in the insurance industry are as upset about the high cost of health care as consumers are. A strong marketplace requires affordable quality products. As things stand, many people find it difficult to find good health insurance within their budget.
Healthcare providers are trying to ease the cost of rising rates so families and individuals get the level of protection they need. We want our customers to be protected. When they are, we all thrive.
The Rising Cost of Healthcare
The United States leads most of the world in healthcare costs, with the price of our healthcare reaching $4.3 trillion or $12,900 per person in 2021. Most other wealthy countries pay 50% as much. In fact, 18% of US GDP is for medical care, a startling number.
Uninsured individuals can expect to pay hundreds for a simple doctor’s visit, and routine tests and hospital visits add up to thousands of dollars. As a result, many people go without the care they need. In the US, around four out of ten adults say they have delayed or skipped medical care in recent years due to the cost. About 25% either go without expensive prescriptions or cut the dosages in half to extend the time between refills, which is a dangerous practice.
Healthcare Insurance Costs Concern People With Coverage
Even those covered by employer or individual plans worry about healthcare costs. Nearly one-third of the insured worry about paying their monthly premiums and often large deductibles. Many people are choosing plans with high out-of-pocket costs because they are cheaper. However, this strategy means many adults must pay thousands of dollars in medical bills before their coverage kicks in. When it does, they usually pay 20% or more in coinsurance.
Healthcare costs are rising faster than inflation, putting pressure on consumers, insurance agents, and insurance companies. Healthcare benefits are a huge part of a salary package, but employers are forced to pay more for coverage while offering their employees less desirable plans.
Easing the Costs of Health Insurance
The above sounds grim, but there is hope. Healthcare providers are trying to ease the cost of rising rates. And we in the insurance industry can employ strategies to lower the cost of health insurance.
For instance, insurance companies are reducing costs by directly contracting with doctors and hospitals to lower prices for in-network services. Many are also requiring preapproval for scheduled in-patient services, a step that is not always popular with policyholders, but one that prevents unnecessary procedures.
Telehealth services saw a dramatic rise during the pandemic and proved to be an effective and cost-efficient way for patients to receive care. Many insurance companies embraced expanded coverage for this service, allowing patients with mobility problems and geographically isolated patients to consult doctors promptly instead of neglecting potentially serious health issues.
Value-Based Health Insurance Programs
Value-based care is an alternative to the traditional fee-for-service model. It ties payments to the quality of care providers deliver and rewards “efficiency and effectiveness.” In short, the medical community is not paid for what it does but for how well it does it. This method has been given more legitimacy recently since the CMS has embraced value-based reimbursement through several offerings, such as the Medicare Shared Savings Program.
Sadly, the fee-for-service model emphasized quantity over quality, which reduced the ability to truly manage a patient’s care and find better treatment options for them.
How can insurance agents help with value-based insurance programs? We can educate our customers on provider treatment and billing practices and help them find an insurance plan for quality providers. Improved medical care results in better long-term outcomes and reduces costs at every level. Patients become healthier, good providers receive higher levels of reimbursement, and the insurance industry becomes more profitable.
NAPA Benefits
How can insurance agents help with healthcare rates? NAPA understands that change must come to the insurance industry, but we embrace this opportunity. Patients deserve high-quality, affordable care; providers deserve to be paid for their superior performance; and insurance agents deserve to make a positive contribution to society while making a solid living. Healthcare costs can be controlled even as medical care improves. And we can help make these changes happen.
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