How to Combat High Healthcare Costs

American healthcare costs have always been high — yet the Centers for Medicare and Medicaid Services predicts they will increase by another 5% throughout 2024. Companies that provide job-based healthcare will feel the impact more severely, triggering them to shop around for better products.

As a producer, you have the task of finding ways to reduce healthcare costs and present cheap insurance plans. Learn more about the factors influencing rising healthcare spending and how you can tailor your strategies to offer more value to your clients.

Request a Free Healthcare Savings Analysis

Unpacking the Surge in Healthcare Costs

In comparing healthcare costs worldwide, America has historically ranked near the top. Here's an overview of some of the reasons why costs are so high and how brokers can help clients combat overspending.

Identifying the Trends Behind Rising Costs

By analyzing the trends driving up healthcare costs, you can create specific strategies to alleviate some of the pressure on your clients. Here are a few of the main factors contributing to the increase in insurance premiums:

• Aging population: Recently, America has seen an unprecedented increase in adults over 65. The Population Reference Bureau predicts this trend will continue, with a 47% increase between 2022 and 2050. As people age, they're likely to have more health problems, increasing the need for medical care.
• Enhanced services: New medical technology has given rise to groundbreaking procedures, which often come at a higher cost. Additionally, staff must upskill to handle these procedures, consequently leading to higher wages. To afford these innovative changes, clients' premiums go up.
• Inflation: While inflation peaked in 2023 and experts anticipate further relief in 2024, medical prices are generally set preemptively. So, despite inflation decreases, premiums are still high.

Proactive Strategies to Curtail Healthcare Expenses

Whether you're dealing with large companies or smaller start-ups, everyone wants to cut their monthly expenditures. Providing your clients with actionable strategies on how to reduce healthcare costs is a surefire way to retain and win more business. Here are some innovative cost-saving approaches for you to share with your clients:

• Evaluate coverage level: While comprehensive coverage options give employees greater peace of mind, they come with a higher price tag. Those who are young and relatively healthy may not require such extensive benefits, enabling them to choose a cheaper plan. Similarly, older employees may opt to pay higher monthly premiums to avoid more frequent out-of-pocket costs.
• Factor in planned costs: Some healthcare expenses occur every month. For example, people with chronic illnesses generally require a monthly prescription. By asking your clients about repeat expenses upfront, you can help them find a plan that encompasses planned costs.
• Opt for generic products: In many cases, generic medication is just as effective as their branded counterparts. Encouraging employees to choose generic alternatives is another way your clients can save costs.
• Comparison shop: Encourage your clients to shop around for health insurance plans. While it's easier to renew what they already have, comparison shopping for the most cost-effective options can save employers and employees in the long run.
• Explore savings account options: If your client has selected a high-deductible health plan, they may also offer their employees access to a health savings account (HSA) or flexible savings account (FSA). As many insurance plans don't offer vision and dental benefits, this is an effective way to cover these occasional costs.

You can provide your clients with even more cost-saving strategies with The Difference Card. Employers can maintain the level of employee benefits — despite rising healthcare costs — and even save up to 18% on their overall insurance spend. Here are just some of the benefits employers gain through this partnership:

• Guaranteed cost savings: If a company's healthcare costs exceed the agreed-upon dollar amount, The Difference Card will cover the excess.
• Extensive services: From Dependent Care Accounts to HSAs, The Difference Card enables employees to access various sponsored benefits.
• Up-to-date compliance: Employers can rest easy knowing their consumer-directed health plans are compliant — this means less paperwork for producers, too!
• Personalized support: Every company receives top-tier support through its dedicated account manager, effectively alleviating the load on human resources staff.
• Industry expertise: Whether your client is a large corporation or a non-profit enterprise, The Difference Card team has the expertise to represent all businesses.

Forward-Thinking Strategies in Healthcare Spending

Individual clients and companies are more likely to stay with a provider if they're satisfied with the benefits. Leveraging benefits technology makes it easier for members to understand what services they're entitled to, helping to quantify their premiums. Producers who partner with The Difference Card can integrate the following artificial intelligence (AI) strategies to lower premiums:

• Streamlined underwriting
• API integrations to collate data from different departments
• Quick support functions such as chatbots and intelligent virtual assistants
• Claims process optimization to ensure fast turnarounds in under two days
• Exceptional customer service across all channels

The MERP Advantage

By leveraging a Medical Expense Reimbursement Plan (MERP) for cost reduction, companies can save up to 18% on their overall insurance spend. Here's how MERP insurance plans work:

• Employees present their Difference Card before medical consultations.
• The practice will indicate the amount owed.
• Employees will advise the practice on the amount the company covers — specific amounts are listed on the back of the card.
• The Difference Card will settle company-sponsored benefits within two days, and the employee will pay the rest.

Empowering Insurance Brokers Against Rising Costs

Rising healthcare costs may be a reality, but producers can recommend several strategies to help clients save money on insurance. If you're on a mission to offer your clients more value, consider partnering with The Difference Card to optimize your healthcare administration.

Since 2001, The Difference Card has been working with producers to maximize client savings and retain more business. We do this by providing exclusive distribution solutions and compliance benefits to put you ahead of the rest! Learn why producers enjoy partnering with us or request a proposal for more information. If you'd like to become a partner, our team is ready to walk you through the process and help you win more business!