Why Your Health Insurance Premiums Keep Rising

Think about your next health insurance renewal.

Just the thought alone can bring stress and anxiety to any business owner or HR professional.

Unfortunately, large increases continue to be the norm. Insurance carriers face more scrutiny than ever, but it's not stopping them from raising your rates year after year. Most employers find themselves trapped in a cycle they can't seem to break.

Why does this keep happening?

No matter how hard you try, there seems to be nothing you can do to stop the increase outside of pure luck. Your broker shows up with renewal numbers, you negotiate what you can, and you're left wondering why your "healthy" workforce still faces double-digit premium hikes.

And the truth is, if you're receiving what seems like a reasonable increase in the fully-insured world, you're likely leaving money on the table.

Three Reasons Your Fully-Insured Premiums Keep Climbing

If your current health insurance plan is fully-insured, here's what's driving those relentless rate increases:

1. Your Premiums Are Their Revenue Stream

Your premiums drive the fully-insured carriers' revenue. Insurance companies are publicly traded entities with shareholders who expect growth and profits.

When was the last time your insurance carrier called to say your rates were going down because your group performed well? It doesn't happen because their business model depends on premium growth, not your group's health outcomes.

2. You're Flying Blind Without Your Data

You don't have access to the data inside your health insurance plan. Fully-insured carriers own your claims data, and they're not required to share detailed information about where your healthcare dollars are going.

This lack of transparency keeps you dependent on the carrier's pricing decisions rather than giving you the tools to manage your own risk.

3. You're Subsidizing Other Groups

Fully-insured carriers determine their annual rate increases by the health of their entire book of business, not your individual group's performance. If you're a healthy group with low claims, you're subsidizing the groups that aren't.

Your 25-person tech company with young, healthy employees gets the same rate treatment as the manufacturing company with an aging workforce and high medical utilization. The carrier pools everyone together, and the healthy groups pay for the sick ones.

You Have Options

If you feel like your fully-insured rates are out of control, you're right. But there are solutions if you're willing to challenge the status quo.

Level-Funded Plans

Level-funded plans combine the predictability of fully-insured premiums with some of the cost control benefits of self-funding.

Partial Self-Funding

Partial self-funding gives you even more control and transparency. You pay for your actual claims plus administrative fees, eliminating the carrier's profit margin on your premiums.

Self-Funded Arrangements

For larger groups, full self-funding offers maximum control and transparency. You see every claim, every charge, and every opportunity to manage costs proactively.

Taking Control of Your Healthcare Costs

You work too hard to feel like there's nothing you can do about rising health insurance costs. The key is working with an advisor who understands that one of your top three largest business expenses deserves more attention than a quick renewal meeting and a rate comparison.

The traditional fully-insured model is broken for many employers. Carriers have misaligned incentives, brokers often take the easy route, and employers get stuck with rate increases they can't control.

But there are options. Alternative funding arrangements can give you the ownership, transparency, and cost control you need to manage healthcare as a strategic business expense rather than an uncontrollable cost center.

The question isn't whether healthcare costs will continue rising. They will. The question is whether you'll take control of those costs or continue letting others profit from your healthcare spend.

Stop accepting "that's just how insurance works" as an answer. Challenge your team and your advisor to look at better solutions. Your employees and your bottom line will thank you.

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