Are You Overlooking the Most Viable Option for Your Employees?
By Kerstin Nemec and Tim Norwood
As an HR Professional, you wear two important hats when it comes to health insurance. Your responsibilities include crafting a comprehensive benefits program for all employees at a cost your company’s overall budget can sustain. While managing your budget, you are also charged with structuring a plan with various ranges of premium and out of pocket coverage costs, so that your employees can afford and actually use their coverage.
For many of you, open enrollment is on the horizon, and you are reminded how difficult your quest is to obtain high quality health care coverage at the most economical price for your company and your employees.
What works? What doesn’t? While there are many strategies to maximize cost savings, most involve shifting costs to the employee through increased deductibles, decreased coverage, skyrocketing out of pocket costs, and unaffordable premiums.
The recent national health insurance debate taught us a great deal about national health issues, and employers should turn this information into an opportunity. A key lesson learned was the value of state sponsored health plans such as Medicaid and the safety net it provides to over 20% of Americans for their health insurance coverage. State plans have changed tremendously over the past two decades and have become a mainstream option for coverage, very similar to what Medicare has become for Americans 65 and over.
With over 70 million Americans insured by Medicaid and the heated debate around healthcare over the past 6 months, Congress and Americans were forced to re-evaluate its perception and value of this program. Employers, especially those who rely on hourly workers to successfully run their business, should recognize why it makes sense to offer state sponsored health plans education and enrollment assistance to these employees. Fifty-nine percent (59%) of the US workforce are hourly workers and even more astonishing is that most US workers (60%), earn $35,000 or less annually. Employers that want to drive loyalty and engagement need to develop member centric options that need to include meaningful choices that meet the diverse needs of its workforce
To evaluate whether state sponsored plan offerings makes sense for your company, each employer should evaluate their employee demographic and understand the differences in coverage and cost between private insurance and state health insurance.
A recent analysis by the Commonwealth Fund Biennial Health Insurance Survey 2016 (How Medicaid Enrollees Fare Compared with Privately Insured and Uninsured Adults), reflects the following findings:
- The level of access to health care that state sponsored coverage provides is comparable to that afforded by private insurance.
- Adults with state coverage reported better care experiences and higher preventive services than those who had been uninsured during the year.
- State plan enrollees have fewer problems paying medical bills and fewer cost related access problems than either the privately insured or the uninsured.
These findings appear to validate the quality of care received by recipients. State sponsored healthcare is most often provided through a private managed care plan at a private hospital or doctor’s office, as most states contract out their Medicaid plans to managed care companies. They are the same insurers that are providing private insurance to many employers such as United Healthcare, Amerigroup, WellPoint, and Kaiser. Many states do not even refer to the plans as Medicaid anymore since they are privately run and give the enrollees network options like private coverage. You can check out quality rankings in your state from the National Committee for Quality Assurance (www.ncqa.org).
But what about the financial comparison of the cost of preventive care and treating illness while saving employees from private premiums, not to mention unaffordable deductibles and out of pocket costs?
There really is no comparison to private insurance, bottom line is state health insurance is a more affordable option. In most states, there is:
- No (or very low) premium.
- No charge for coverage, no deductibles or out of pocket maximum limits, and small co-pays for certain services.
- Coverage is generally available to the entire family, which provides needed health coverage for low-income adults and children.
- Coverage includes medical, prescription drugs, and generally vision and dental.
- With very low upfront costs, your valuable employees will have access to coverage AND use it.
State health plans are not a one size fits all band-aid. Eligibility is based on household income and size and varies by state. Most likely 10-20% of an hourly workforce population will qualify, but generally those who do qualify are the employees who need it most. And many of these employees are the backbone of your operation, and will value the enhanced financial stability you will provide through these plans quality care.
As you look ahead to the Fall, Open Enrollments, and your 2018 budget and benefits planning, consider researching and possibly piloting a program to add State Sponsored Health Plan education and enrollment services to your benefits. These services give employees a consumer-driven experience by helping them find the right plan for their pocketbook, and as a company you’ll benefit from healthier and engaged employees, and reduced insurance costs.