Retirement Concerns by Andy

Health Insurance, Costs, Coverage, and Employee Retention

• Andrew Barrett

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Health Insurance Costs, Coverage, and Employee Retention

Executive Summary:

This document summarizes key findings regarding health insurance costs, the differences between group and individual coverage, and the crucial role health benefits play in employee retention and organizational success. Employer-sponsored health insurance is a significant factor in both employee well-being and employer costs, with considerable variations across states and plan types. This analysis demonstrates a strong link between robust health benefits and improved employee retention and overall organizational performance.

Key Themes and Findings:

  1. Cost of Employer-Sponsored Health Insurance Varies Significantly by State:
  • Regional Disparities: The cost of health insurance premiums varies widely across the United States. The Northeast region tends to have the highest premiums due to higher per capita healthcare spending and more comprehensive state mandates.
  • "The Northeast region tends to have higher premiums, reflecting higher per capita healthcare spending and more comprehensive healthcare mandates1."
  • High-Cost States: New Jersey, Massachusetts, and New York consistently report the highest average premiums for both single and family coverage.
  • "New Jersey, Massachusetts, and New York have the highest average premiums for both single and family coverage1."
  • Low-Cost States: States in the South and parts of the Midwest generally have lower premiums.
  • Specific State Examples:In 2023, New Jersey averaged $9,662 for single coverage and $26,870 for family coverage.
  • In 2023, Mississippi averaged $7,243 for single coverage and $21,939 for family coverage.
  • National Averages (2023):Average annual cost for family coverage: $23,968.
  • Average annual cost for single coverage: $8,435.
  • Monthly Benchmarks: A 2020 survey showed monthly benchmark premiums for a 40-year-old ranging from $343 in Minnesota to $889 in Alaska.
  • Influencing Factors: Costs are influenced by state regulations, healthcare spending, and the comprehensiveness of the health plans offered.
  1. Group vs. Individual Health Insurance Coverage:
  • Participation Rates: Approximately 61% of Americans are covered by employer-sponsored group health plans.
  • Cost Comparison (2023 Monthly Averages):Group: $703 for self-only; $1,997 for family.
  • Individual (Unsubsidized): $456 for self-only; $1,437 for family.
  • Coverage Flexibility:Group plans are typically selected by employers, offering less customization for individual needs.
  • Individual plans offer greater flexibility to tailor coverage.
  1. Impact of Health Benefits on Employee Retention:
  • Retention and Tenure: Offering comprehensive health benefits can significantly reduce employee turnover.
  • Turnover Reduction: Offering robust health benefits can reduce turnover by as much as 26%.
  • "Offering comprehensive health benefits can reduce turnover by 26%3."
  • Benefit Valuation: Health insurance is the second most valued employee benefit, after wages.
  • "Health insurance is the second most valued employee benefit after wages; 56% of employees with employer-sponsored health benefits consider it a major factor in job retention38."
  • Employee Longevity: Older employees (55-64) average 9.6 years of tenure, while younger employees (25-34) average only 2.7 years.
  • "Employees aged 55–64 stay an average of 9.6 years in their jobs."

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Speaker 1:

Welcome back to the Deep Dive. Today we're diving into something that well, let's face it affects all of us health insurance. It's a topic that can be super confusing, but we're going to break it down, look at different types of coverage and see how it all ties into keeping employees happy and, you know, sticking around.

Speaker 2:

Yeah, and what we'll find is that it's not just about numbers, you know, it's about people, employers, the whole health care system. We're going beyond just the basics and figuring out the why.

Speaker 1:

I like it. So let's start with the basics. There are a bunch of ways to get health insurance here in the US, right Can?

Speaker 2:

you give us the lay of the land. Sure, the two main types you'll see are group plans and individual plans. Group plans usually come from employers, covering a whole bunch of employees under one policy, and then individual plans you buy yourself straight from an insurance company.

Speaker 1:

Gotcha and I know tons of people get their insurance through work. Is that the most common way to be covered?

Speaker 2:

It is. About 61% of Americans rely on those employer-sponsored group plans. There are a few reasons for that. One big one is something called risk pooling. Basically, with a big group, the risk of high health care costs gets spread out, so it helps keep those monthly premiums lower for everyone.

Speaker 1:

Makes sense, Especially since employers often help out with those premiums too. But what about people who don't get insurance through work?

Speaker 2:

That's where individual plans come in. They're a lifeline for folks who are self-employed or work for small businesses that don't offer coverage or are between jobs, and they give you more flexibility. You can customize the coverage to fit your needs and what you can afford.

Speaker 1:

More choices, but I bet there's a catch right.

Speaker 2:

There is. Individual plans can be way more expensive than group plans Because you don't have that risk pooling or help from an employer. You're shouldering more of the cost. This year, the average monthly premium for an individual plan was $456 for single coverage and $1,437 for families, and that's even before you factor in any government help. Compare that to group plans, where the average was $703 for single and $1,997 for families.

Speaker 1:

Wow, okay. Yeah, that makes it pretty clear why employer-sponsored insurance is so popular. But you know, it's interesting how the cost of insurance can change so much depending on where you live. Why is that?

Speaker 2:

Absolutely. Location really matters. Several things cause those differences. One is state regulations. Some states have tougher rules about what has to be covered by insurance, which can push up costs. Like if a state says you have to cover certain therapies, insurance companies might need to charge more to cover those expenses.

Speaker 1:

Danielle Pletka MD. Ah, so more coverage can sometimes equal higher cost. What else plays into those regional differences? Marc Thiessen.

Speaker 2:

MD. Well, the overall cost of health care in the area matters too. If hospitals and doctors in a region have higher costs, those costs get passed on to us as higher insurance premiums, like if there's a shortage of specialists or huge demand for certain services, prices go up and insurance follows suit.

Speaker 1:

It's like a domino effect High demand, fewer resources. Everybody pays more. Now we know we're going to get into the nitty gritty of different types of plans later, but I'm curious from an employer's point of view is offering health insurance just a box to check, or is there more to it?

Speaker 2:

It's way more than checking a box. In today's job market, health insurance is crucial for attracting and keeping good employees. Think of it like this Offering good benefits gives employers a leg up, especially when they're trying to recruit those skilled workers. It shows they care about their people and are willing to give them something valuable beyond just their paycheck.

Speaker 1:

So it's not just about finding new people, it's about keeping the ones you have happy too.

Speaker 2:

Exactly when employees feel like their health matters and that they've got good insurance, they're happier with their jobs and less likely to jump ship. Studies actually show that offering health insurance can really cut down on employee turnover. It's a powerful way to build a team that's in it for the long haul.

Speaker 1:

Sounds like a win-win Employers get great people and employees feel valued. I'm seeing why this is such a big deal in the whole health care conversation in the US.

Speaker 2:

It is, and as we go deeper, you'll see how it affects not just individual choices but the workplace and the entire health care system.

Speaker 1:

Definitely a lot to think about, but before we get ahead of ourselves, let's get back to basics. We talked about group and individual plans. Can you walk us through some of the most common types within those categories?

Speaker 2:

Of course, you've probably heard terms like HMO, ppo, epo. Let's break those down and see how they differ in cost flexibility and what they actually cover.

Speaker 1:

OK, so let's untangle these health insurance acronyms. We've got HMOs, PPOs, EPOs. It's like alphabet soup. Where do we even start?

Speaker 2:

Let's start with HMOs. That stands for Health Maintenance Organization. Hmos are known for having lower premiums, but that comes as a bit of a trade-off. Usually with an HMO you have to pick a primary care physician and they're like the gatekeeper for your care.

Speaker 1:

Oh, so you can't just see any specialist you want, whenever you want.

Speaker 2:

Right. If you need to see a specialist, you'll usually need a referral from your primary care doctor, and HMOs tend to have a smaller network of providers too, so you've got to make sure the doctors and hospitals you want to use are in the HMO's network, Otherwise you might have to pay more out of pocket.

Speaker 1:

Gotcha Otherwise you might have to pay more out of pocket. Gotcha Lower premiums, less flexibility, smaller network.

Speaker 2:

Okay, what about PPOs? Ppos, or preferred provider organizations, give you more freedom to choose your doctors and hospitals. You don't need a referral to see a specialist, and you can usually go to providers both in and out of the PPOs network.

Speaker 1:

That does sound more convenient, but I'm guessing there's a price tag attached to that convenience.

Speaker 2:

You got it. Ppos usually have higher premiums than HMOs. You're paying for that extra flexibility. Even if you see a doctor outside the PPOs network, you'll probably have to shell out more.

Speaker 1:

So it's a balancing act between cost and flexibility. And what about those EPOs we mentioned? Where do they fit in?

Speaker 2:

EPOs exclusive provider organizations are like a mix between HMOs and PPOs. They have a bigger network than HMOs, but you still have to stay within their network and, like HMOs, you usually need a referral for a specialist.

Speaker 1:

Okay, so a middle ground. Now, this might sound like a silly question, but how do people even decide which plan is right for them? There's so much to think about.

Speaker 2:

Yeah, it's definitely not one size fits all. The best plan really depends on what you need and what you prefer. Like if you're generally healthy and don't see specialists often, an HMO might be good to save money on those premiums. But if you really value flexibility and choice or have a chronic condition that needs specialists, a PPO might be better, even if it costs more.

Speaker 1:

Makes sense, weighing those pros and cons, figuring out what works best for you. We've talked a lot about the cost and different types of plans, but let's get back to something we mentioned before the connection between good health benefits and employees staying with a company. Can you?

Speaker 2:

talk more about that. Of course, like we said, offering good health insurance is huge for attracting and keeping talent, but it's more than just basic coverage. Smart companies are realizing that when employees are healthy, the company benefits. They're investing in programs that help people stay well, and it's paying off Better productivity, morale overall, happier employees.

Speaker 1:

So it's about creating a culture of well-being, not just checking a box on a benefits list.

Speaker 2:

Exactly. We're seeing companies adding things like gyms at work, help paying for gym memberships, wellness challenges, even mental health resources. It's not just about physical health. It's about creating a supportive community at work.

Speaker 1:

It sounds like these companies are really stepping up beyond just the old school way of doing things. Any examples of companies doing this really well?

Speaker 2:

Definitely REI, the outdoor gear company, comes to mind. They've got a whole wellness program with fitness reimbursements, yoga and meditation classes at work. They even do adventure trips for employees to get out in nature and bond.

Speaker 1:

Wow, adventure trips, that's next level.

Speaker 2:

Yeah, any others. Google's another great example. They're all about employee well-being, with on-site clinics, gyms, healthy food choices, great parental leave policies, and they really encourage mental health with counseling and mindfulness programs.

Speaker 1:

Sounds like they're putting their money where their mouth is when it comes to taking care of their people. Yeah, it's cool to see that connection between a healthy, happy workforce and a successful company.

Speaker 2:

Totally. It's a trend we're seeing more and more, and I think it's good news for everyone.

Speaker 1:

Now switching gears a bit. I'm curious about your take on the future of health insurance. With all the changes and new stuff happening in health care, what do you see coming down the road?

Speaker 2:

Well, technology is going to be a big part of it, for sure. We're already seeing telehealth taking off. Patients can video chat with doctors or use online platforms. It's making health care easier to get, especially for people in rural areas or who have trouble getting around.

Speaker 1:

It's like having a doctor's office in your living room. That's amazing, and I bet that could help lower healthcare costs too, right?

Speaker 2:

It could. Telehealth cuts down on expensive office visits and makes things more efficient. Another big change is personalized medicine, using genetic testing and other data to create treatments that are tailored for each person.

Speaker 1:

So moving away from that one-size-fits-all approach to health care.

Speaker 2:

Exactly Personalized medicine could change how we prevent and treat diseases, leading to better results and maybe even lower costs in the long run.

Speaker 1:

Sounds like there's a lot to look forward to in health care. But with all this innovation, are there any challenges for the health insurance industry as it tries to keep up?

Speaker 2:

Well, there are definitely challenges. One of the biggest is the rising cost of health care, which is a whole other can of worms. We've touched on some of the reasons More people needing specialized care, new medical technology, the fact that people are living longer. It's putting pressure on insurance companies to control costs while still covering what people need.

Speaker 1:

Not an easy task. Any other challenges that come to mind.

Speaker 2:

Data security and privacy is a big one. With technology playing a bigger role in health care, we have to protect people's sensitive information. Insurance companies and health care providers are working hard to implement strong cybersecurity measures to keep that data safe and confidential Data security is definitely a huge concern these days.

Speaker 1:

It's good to keep that data safe and confidential. Data security is definitely a huge concern these days. It's good to know they're taking it seriously. Now, before we get to our final thoughts, there's something I've been thinking about throughout this whole conversation. We've talked a lot about how important health insurance is for getting health care and how it affects the workplace, but it's also really personal and sometimes even emotional for people and families. It can feel overwhelming trying to figure out this whole system and make choices that directly impact our health.

Speaker 2:

You're absolutely right Health insurance is deeply personal and it can be really stressful, especially if you're dealing with health problems or trying to understand all the complicated policies and jargon.

Speaker 1:

So what advice would you give to someone who's just feeling lost in the world of health insurance?

Speaker 2:

Don't be afraid to ask for help. There are people who can help you navigate this and answer your questions, whether it's your HR department, an insurance broker or a non-profit that specializes in health care. Help is out there. Don't hesitate to reach out.

Speaker 1:

Sometimes just having someone explain things clearly can make all the difference. Any other tips for getting through this maze?

Speaker 2:

I'd also say do your research and be proactive about understanding your options. Read your policy carefully. Ask about coverage and costs. Compare different plans to see what fits your needs and your budget. Knowing what you're dealing with is really important when it comes to health care.

Speaker 1:

That's great advice. It's empowering to know that even in this complicated system, we can advocate for ourselves and make good decisions.

Speaker 2:

Absolutely. And remember health insurance is about protecting yourself and your family. It's an investment in your well-being and peace of mind.

Speaker 1:

Well said, this has been a fascinating conversation.

Speaker 2:

I feel like we've only scratched the surface of this whole world of health insurance we have I feel like we've only scratched the surface of this whole world of health insurance we have, but I think we've laid some important groundwork and hopefully given our listener a good understanding of how it works and how it affects them.

Speaker 1:

I agree. So as we wrap up this deep dive, let's move on to our final thoughts and key takeaways for our listener. All right, so we've really dug deep into this whole world of health insurance, looking at different plans, what makes costs go up and how important it is for keeping employees happy. As we wrap things up, let's boil it down to the essentials. What are the big takeaways for our listener? What do they really need to remember as they figure out their own health insurance?

Speaker 2:

You know, I think the most important thing is realizing that health insurance isn't one size fits all. You got to think about it personally. What do you need for your health, what can you afford and what kind of lifestyle do you have? What works for one person might not work for another.

Speaker 1:

Yeah, that's so true. It's easy to get lost in all the choices and all the insurance lingo, but at the end of the day, it's about finding the coverage that's right for you. What else should people keep in mind?

Speaker 2:

Don't be afraid to ask questions Seriously. Talk to your HR person, talk to an insurance broker, talk to a healthcare advocate Whoever can help you figure things out Understanding your plan. All the little details about coverage and costs can save you from surprises down the road.

Speaker 1:

Asking questions is key. It's like health insurance has its own secret language, but there are people who can translate. Now we talked about how employers are using health benefits to attract and keep good employees. What are you seeing in that area?

Speaker 2:

It's not just about having the best insurance plan anymore. It's about taking a more well-rounded approach to employee well-being. Companies are starting to see that investing in their employees' health and happiness makes a difference. People are more productive, they're more engaged. They're more likely to stick around.

Speaker 1:

So it's about building a culture of well-being, not just checking a box.

Speaker 2:

Exactly. We're seeing all kinds of cool initiatives gyms at work, wellness challenges, mental health resources, even financial wellness programs. It's about realizing that employees have lives outside of work, and supporting their overall well-being is good for everyone.

Speaker 1:

It's pretty awesome to see companies really stepping up in that way. Now, looking ahead, what do you think is going to shape the future of health insurance?

Speaker 2:

Technology is going to be huge, no doubt about it. Telehealth is changing how we see doctors, and personalized medicine has the potential to create custom treatments based on your genes and other data. These could make healthcare more efficient, more effective and easier to get.

Speaker 1:

It's mind-blowing to think about how much technology is changing healthcare. But with all this progress, are there any bumps in the road for health insurance as it tries to keep up?

Speaker 2:

Definitely. The rising cost of healthcare is a big one. As medicine gets more advanced, it also gets more expensive. Insurance companies are trying to figure out how to offer good coverage without breaking the bank for employers and individuals.

Speaker 1:

It's a tough puzzle to solve. What advice would you give to our listeners as they try to make sense of all this?

Speaker 2:

Stay informed, be proactive and speak up for yourself. Don't be afraid to ask questions, compare different plans and make sure you understand what your plan covers. Health insurance is about taking care of yourself and your family. It's worth it to make smart decisions.

Speaker 1:

That's such great advice. It's a good reminder that we have the power to make choices. Any final words of wisdom.

Speaker 2:

As you figure out your health insurance, remember what it's really about Protecting yourself and your family. It's a safety net so you can get the care you need without worrying about going broke. It's an investment in your health and well-being, and that's something worth fighting for.

Speaker 1:

Beautifully said. This deep dive has been so eye-opening. Thanks for sharing your insights with us.

Speaker 2:

My pleasure, it's been great.

Speaker 1:

And to our listeners thank you for joining us on this journey into the world of health insurance. We hope you learned something and feel more confident navigating this crazy system. Until next time, stay curious, stay informed and stay healthy.