At the center of the ongoing political debate is the question of how to counteract the continuous increase of medical procedures and insurance premiums. This has also become an increasing dilemma for small businesses as they attempt to neutralize the effects of an economic recession. In fact, in some states the cost of insurance premiums for small businesses has risen more than 140% over the past seven years.

These insurance rate increases actually outweigh the overall increase in operating costs of for hospitals and doctors. For example, while operating costs in the last 4 years have on average increased between 35-40% for health care providers, small business owners are said to have experienced an increase in insurance rates of upwards of 55%.

So where is this irregularity derived from?
• The over utilization of medical procedures as a result of individuals abusing the benefits of a lower deductible, and not being cognizant of the actual cost of medical procedures.
• The statement above is in conjunction to the underpayments/reimbursements by government run programs such as Medicaid and Medicare to health care providers. Private insurance carriers are forced to compensate for the lack of financial reimbursement to doctors and hospitals. This is certainly a fear associated with the public option proposed by the government.
• Some believe that there is a direct correlation between the rising cost for small business owners and the salary of insurance company executives.
  What methods should be implemented to help regulate the cost of health care services?

• Health care providers and insurers need to be more transparent in the actual costs of their services. For example, providing accurate information illustrating the cost of procedures, as well as administrative costs. This will hopefully drive down the cost of health care by creating a more consumer driven health insurance market.

What are ways for small businesses to still provide health insurance to their employees without jeopardizing the financial integrity of their company?
• A solution that is becoming more and more popular today is for employers to set up a Health Reimbursement Arrangement. This allows employers to allocate a fixed amount of money annually towards providing health coverage for their employees. It also encourages a consumer driven environment as employees will need to shop the different health insurance options that are available to them.

If you are interested in seeing whether a Health Reimbursement Arrangement is right for your small business, speak with an Advisor at MyInsuranceExpert.com.




MyInsuranceExpert.com helps people throughout the United States acquire affordable insurance from A-rated carriers. By leveraging “Artie”, a crazy old guy who knows everything about insurance (actually a proprietary technology) licensed Advisors at MyInsuranceExpert.com find the best value for each client.