Wish That Group Health Insurance Wasn’t So Expensive?
Part II: The Only Place You Will Find Success Before Work Is In The DictionaryByRaymond D. MatkowskyMany companies do not apply the same effort and diligence to managing their healthcare costs as they do with their other business investments. The health of your employees is a business investment. It is an investment that could pay you fantastic dividends or send your company into bankruptcy.
If your choice is going to be based on convenience rather than careful study and valid information, you are almost sure not to get the best deal you can.
The Return On Your Investment Justifies The Time
The process of gaining enough information for you to make a reasonable and beneficial decision can take several months to complete. There are more options to wade through than many people realize. The trick is to use these options to benefit you and not just the insurance company.
You will need to take time to evaluate each option carefully. It is a time-intensive and judgment-intensive process. So, don’t wait until you get your renewal notice to try to put a new package together.
Investing Requires A Continuing Effort, So Does Healthcare Management
You will find that controlling your healthcare expenses is not a one-time project. The effort will need to be made repeatedly during the course of your business. Since the insurance market is in a constant state of change, you will need to be also.
Not All Companies Offer The Same Coverage
There are considerable variations among policies and the majority does exclude certain treatments. You must read through the policy to see what is specifically excluded and make judgments as to how well they fit the needs of your employees. While you want an affordable price, what good is a low cost plan if the coverage is inadequate?
Buyers beware! One well known method of reducing a quote is to offer a low premium the first year when a number of treatments are excluded then raising the premium sharply in subsequent years. The insurance company can also just consider the first year’s quote as a loss-leader to be made up in the future. You need to remember that the insurance company is looking out for their own interests, not yours. Never make your decision solely based on the cost of your monthly premium.
Also, beware of “Life-Style” dependent policies. As an employer, it is a futile effort to try to control the life styles of your employees. To many, no convincing evidence has been presented to support the belief that “Life-Style” changes will successfully reduce the need for medical coverage for the general population. It maybe true for a small number of people and wishful thinking for the majority.
However, if you do decide to implement such a program, pay careful attention to its costs. You may find that it is cheaper to pay a higher premium than the costs of implementation and operating such a program.
Health Insurance Policies Are Always Customized
All medical insurance policies are custom assembled. Insurance companies can and do put plans together to suit your individual needs. The question becomes, who does the assembly you or the insurance company? You are better off assessing your own situation, determining your needs and then contacting the insurance providers.
After determining your needs, there are only five or six factors that you should be concerned with. They are:
Premium
Deductibles
Co-payments
Co-insurance
Out of Network Costs
Total Out of Pocket Costs
When it comes to designing a policy, each of the above factors is extremely flexible and can be tailored to fit your needs and pocketbook. However, you are the only one that can and has an incentive to do so.
With the exception of “Out of Network Costs” the combination of factors will be a function of “Total Out of Pocket Costs.” Therefore, you should concentrate on an acceptable figure and modify the others to give you the best possible deal within that restriction.
Next month, Part III of this series will suggest what factors to concentrate on since they are under your control. In the mean time, if you have any comments or suggestions I would welcome hearing them and possibly incorporating them into our next newsletter. You may forward any comments to me at rdm@datastats.com.
Copyright © 2002 Raymond D. Matkowsky
Raymond D. Matkowsky is the Chief Executive Officer of Data Stats, a consulting firm specializing in system or product improvement through mathematical and scientific modeling. He can be reached at rdm@datastats.com or through Data Stats’ web site at www.datastats.com |
