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Health Insurance: Employees Shoot Themselves in the Foot

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Most employees with decent existing health care coverage essentially shoot themselves — and their companies — in the foot by not properly utilizing their health benefits.

I’m going to tell you a story about a company with between 300 and 400 employees that could see its health care premiums rise somewhere between 10% and 20% when this year’s renewal takes effect. Everyone knows company health care plan premiums seem to rise every year, and there are plenty of macro-level reasons for why this occurs. But this story provides a new perspective on a more “micro” level for why those costs increase.

In the company, 50% of the employees covered by the plan have not selected a primary care physician. They do not go to the doctor for an annual checkup — largely because they don’t have a doctor. When they suffer an injury or illness and need medical attention, they go to the emergency room. While they pay an out-of-pocket deductible of $150 for the ER visit, the ER facility bills the company’s health insurer many times that amount. This is one of many factors that can lead to the company’s claims figure in a year to exceed what the health plan provider collects in premiums. When that happens, what do you think is going to happen to your health insurance premium for the next year?

Early detection is a key factor in controlling health care costs, but too many people with coverage just don’t go to the doctor or the dentist — even if an annual checkup or twice-a-year visits to the dentist for a checkup and cleaning would cost the employee nothing or perhaps a $20 co-pay. A recent story on our sister website, BenefitsPro, revealed that ER visits for dental problems increased 16% from 2006 to 2009. Most of those cases could have been avoided with regular checkups.

While Life Insurance Selling is planning additional coverage in an upcoming issue about common and preventable reasons why the average American company sees its health insurance premiums rise every year, I’ll leave you with one more example:

Generic versions of a well-known name-brand prescription drug to control cholesterol became available Nov. 30. The makers of the name-brand product want people who are using it to stay with it and not go to the generic equivalent, so they offer a program that includes a $4 co-pay card people can use at their pharmacy.

Sounds great, right? You can keep using the name-brand drug for only $4 per prescription. The thing is, your health insurance provider is likely going to get charged about $140 for that prescription. If the person goes with the generic equivalent? The health insurance provider gets charged about $7.

Now think about what kind of increase you might see in your company’s health insurance premiums when annual renewal time comes around. We need employees to stop shooting themselves — and their companies — in the foot. We can’t afford the ER visit.