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 An Alternative to Controlling Healthcare Cost

In the past 15 to 20 years health care insurance premiums for many employers have increased at double digits year over year. Most employers want to maintain an employee insurance plan so they find ways to implement plan changes to reduce the cost of the plan to continue coverage.  Additionally, insurance companies are constantly introducing new products to curtail the ever
increasing cost of health care insurance.  Sometimes these changes are more successful than other but usually result in continually increasing health care cost.

Another option to reduce the employer’s cost for health care is to change the contribution strategy which simply means increasing the employee’s contribution towards the cost of the insurance.  Already most employees are responsible for most or the entire cost of their dependent insurance which make dependent insurance impossible for most worker to afford.  The cost for dependent insurance in South Florida specifically, is normally in excess of $1,500 per month which is out of reach for many workers.

Many employers are at the limit for cost shifting and need to find another solution to curtail the ever increasing cost of healthcare insurance which leads me to my topic… an alternative to controlling health care cost.  Unfortunately this solution does not impact the cost of health care insurance for employers with fewer than 100 employees although this segment could still benefit from this
solution.

The alternative I’m recommending is introducing Wellness and Preventive Health Care Programs to your benefits strategy.  Insurance premium rates for most employers with 100 or more employees are based on the claims utilization/experience of the employee population so wouldn’t it be in the long term interest of the employer to improve the health status of employees to lower the cost of health care insurance?   There are wellness companies that specialize in such programs as:

                                                 Health Risk Assessment
                                                 Smoking Seccession
                                                 Diet and Weight Loss
                                                 Exercise Programs
                                                 Medication Compliance
                                                 Healthy Pregnancy
                                                 Health Counseling

These and other programs are available to improve the health of the employees.  The secret of Wellness programs is cost prevention which makes it difficult to quantify the immediate success of the investment.  Although two Harvard Economist reported in Feb 2010 Health Affairs that medical cost falls by about $3.27 for every dollar spent on wellness and that cost linked to days off work fall
about $2.73 for every dollar spent. http://content.healthaffairs.org/content/29/2/304.abstract. These programs have shown significant success and are worthy of consideration to reduce health care cost in the long run.  Additionally, these programs have proven to increase employee morale and reduce absenteeism.     

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