June 11, 2024

Let’s keep health insurance affordable by avoiding ill-considered mandates

Valerie Bogdan-Powers, President of HUB|Horan

The Hub Team works with companies large and small on one of the toughest challenges facing American businesses today: finding affordable health insurance coverage for their employees. At Hub, a risk insurance and employee benefits consulting company, our team is on the front lines with business leaders as they struggle to maintain this essential employee benefit in the face of unceasing cost increases.

It’s a crisis that has only become worse in recent years. The Kaiser Family Foundation (KFF), a nonprofit health care policy organization, reported that the average cost for a family coverage plan jumped by 7% in 2023 to nearly $24,000, with workers paying an average of $6,575 toward that cost. The current health care trend expects costs to rise another 6.5% in 2024.

As we work with clients to find the best coverage they can afford, I see up close the impact these unending increases have. For many employers, health insurance for their employees is their second greatest expense. In survey after survey, they name it among their top concerns.

The reasons for high insurance costs are many and complicated. The many factors that affect cost are overall health status of individuals, costs that the provider and hospitals systems charge, costs that the pharmaceutical companies charge and a whole lot of regulation mixed in.  Whether it be a fully insured plan where the carrier determines the actuarial rate to charge or a self-funded plan where the employer sets actuarially based rates, these rates need to ultimately cover the costs of care that is being utilized. So, when costs go up, plans have no choice but to raise premiums.

While it’s not the intent, many state laws that look to be protecting the employee can actually make things worse. They can increase costs for the employer, which will ultimately affect individuals as those increased costs get passed on in higher employee premium shares. That’s why I appreciate OAHP’s partnership with us to educate Ohio lawmakers about the economic consequences a bad bill can have for businesses and their employees.

When public policy changes are considered regarding health care, we need to take into account the cost impact of what is being proposed. Any impact that increases cost will cause plan rates to increase, which has a direct impact on employers’ budgets and employees’ wallets.

Ohio’s employers and health insurance brokers call on state lawmakers to recognize the threat that new mandates pose to health care access and economic prosperity for all Ohioans. We hope instead to see laws that will impact the true drivers of health care costs and allow employers and employees to continue relying on the high-quality care they expect and deserve.