Health care costs have been increasing at a significantly faster rate than wages, economic growth, and inflation for decades. The cost pressures leading to these price increases include greater demand for healthcare from an aging population, obesity, the availability of advanced procedures and medicines, fragmented care, cost shifting, etc. Since the passing of the Affordable Care Act (ACA) in 2010, there have been additional cost pressures through requirements on what health insurance must cover and how much it can cost.
In response to health care cost increases, most employers resort to tactics such as increasing deductibles, coinsurance, and going out to bid in place of using a strategic approach to cost control. These tactics address only the symptoms of health care cost increases rather than the underlying causes. In contrast, MCG has successfully used the following strategic approach to cost control in order to keep increases in its clients' annual health care costs significantly below the national average:
MCG's strategic approach is most effective with organizations that have 150 or more employees. First, 150 employees is about the size that the cost of benefits consultants, who are paid directly by the job, becomes less than the cost of brokers, who are paid a commission based on the cost of health benefits offered. Second, organizations with 150 or more employees have tactics available to them that smaller employers don't have.
Through actuarial risk assessment and plan management, MCG is able to address the causes behind health care cost increases and thus control premiums rather than pass costs on to employees. As a result, MCG's clients have seen increases in their health care costs that are roughly half of the national average-saving these employers millions of dollars.
To read more about MCG's strategic approach to cost control, see:
Cost Control Strategies in an ACA World, Part 1: Strategies vs. Tactics
To learn more about how cost control tactics vary by organization size, see:
Cost Control Strategies in an ACA World, Part 2: Which Tactics are Right for Your Organization?
There has been a lot of speculation surrounding the GOP effort to “repeal and replace” the Affordable Care Act (ACA). As it currently stands, the House Republicans passed the American Health Care Act (AHCA) that repeals the employer mandate and individual mandate, modifies contribution limits for Health Savings Accounts, and permits states to waive some of the ACA’s “Essential Health Benefits.” It is important to note that the House bill has not yet become law and may undergo significant changes in the Senate. MCG encourages…
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2017 brings much anticipated change for our nation and the laws that govern employee benefits. As always, the MCG team is committed to following legislative and regulatory developments as they occur, then developing a game plan and any modifications necessary to achieve your benefits goals. In 2017, we will continue to help you achieve your mission through our dedication to quality, integrity, and leadership in the areas of benefits cost control, compliance, and communications. MCG is here for you.