Health insurance — can’t live with it, can’t live without it. This year may bring many changes to the way insurance coverage is delivered, but current predictions lean toward the idea that the status quo will be maintained. Employers and individuals alike could be hard hit in 2017 and experience uncertainty in the future, regardless of what plan they currently are part of. Rate hikes are nothing unusual, and this year continues the trend of percentage increases in the double digits.
Across the nation, the average increase in cost of coverage for those covered by Affordable Care Act (ACA) plans is 25 percent. Understanding the lay of the land and knowing what options are available for individuals and for employers who want to offer coverage to their employees is essential to making an informed decision about health care plans. Here we’ll take a look at national and local trends, what the AGC Health Benefit Trust has to offer, options for employers and what the future may hold.
A number of factors contribute to this year’s jump in coverage prices, including lack of participation in plans by the typically healthy 18- to 34-year-old age bracket, low revenues driving insurance companies out of some states’ markets and thereby decreasing competition and, of course, the ever-increasing cost of doctors’ visits and procedures, to name a few.
Due to the combined and related effects of lack of participation and stagnating revenue, carriers have pulled out of insurance markets in many states. Alaska is a prime example of this, with Moda Health exiting the state, leaving uninsured Alaskans with Premera as their only carrier option and cutting the total number of plans available from 15 to five. This reflects a larger nationwide trend, with the U.S. Department of Health and Human Services reporting that nearly one in five people will have just a single insurer offering health plans in their market. Because of this, more than 1 million existing customers nationwide (and possibly as many as 2 million) will be forced to select a new coverage provider for the upcoming year.
In addition to having fewer carriers and plan options, individuals, families and employers alike must adjust their budgets to accommodate the increase in rates. Though some states such as California will only see an average rate increase of 13.2 percent, customers in Alaska who are currently with Premera can see increases anywhere between 7 percent and 40 percent. Those who were formerly with Moda Health and are now making the switch to Premera can expect increases of 25 percent to 40 percent. On a positive note: AGC offers coverage to members through a custom AGC Health Benefit Trust that offers plans from UnitedHealthcare. We’ll explore this more later in the article.
Although 82 percent of Alaskans are eligible for subsidies that reduce monthly payments, the bottom-line numbers still demonstrate how large a disparity there is between the average of what Alaskans pay for insurance compared with the rest of the nation. The national average for a 27-year-old with benchmark ACA coverage is $302 per month. In Alaska, that average is $750. For a family of four the national average for coverage is $1,090. In Alaska, that average is $2,750. When considering that the U.S. has the most expensive health care of all countries, and Alaska has the highest health care premiums in the U.S., you could say that we have the most expensive health care in the world.
Despite these deterring factors, employers remain committed to offering health benefits to employees, recognizing it as an essential part of attracting and retaining talent and maintaining employee satisfaction. There are many options open to employers looking to maintain benefits while easing the financial burden imposed by higher insurance rates. Cost-wise strategies on the rise include telemedicine services, medical “vacations,” consumer-directed health plans, narrow network health care plans and self-insuring. Each of these options presents different pros and cons and is not as comprehensive as traditional options.
AGC of Alaska has, for many years, offered our members access to alternate insurance plans through the AGC Health Benefit Trust, which is run along with the AGC of Washington and Inland NW AGC chapters to offer the best options and pricing. These plans are purely a member benefit and a service we are proud to provide to our membership.
The Trust offers health and life insurance through UnitedHealthcare, and vision and dental coverage through The Standard. The number of plan options for health coverage alone totals 15, which is three times the current level of five plans under Premera. Dental, vision and life also have multiple options, and these plans can be added or combined in whatever ways best work for your needs.
Those who are part of this plan also have the option to participate in the Dollar Bank program — something that union health plans have long offered but has been unavailable in other plans. This provides a unique solution to help employers and employees deal with the seasonal nature of the construction business by allowing employees to build up a “Dollar Bank” during the busy months and then use those banked dollars during the lean months. This means employees won’t have to worry about losing their health benefits when the season is over and they need them most.
Detailed information about the plans is available online at www.AGCAK.org, or you can email firstname.lastname@example.org for more information or a free quote.
Though the outlook for health insurance in 2017 isn’t the rosiest, there are still many avenues for success open to employers. As many AGC of Alaska members have found, those options available through AGC Health Benefits Trust might just be the best ones for you and your employees.
Lauren Sharrock can be reached at email@example.com or 907-561-5354.