Health Care Benefits – More Expensive Every Year

9 Oct 2017 Karina S. Henkel

For my company it’s that time of the year again. Once a year, every company that offers health benefits to its employees has to choose a new health care plan. This plan is then valid for one year until the health insurance company offers new plans again.

In the US, employees generally have no choice which health insurance company they are going to be with for a year. If the company the employee is working for offers health care benefits, the employee can take it or leave it. That is the only choice he or she has. This changed a bit when the Affordable Care Act (Obamacare) started. People who either don’t have jobs or whose companies don’t offer health benefits are now able to choose a plan. They actually do have a choice between several health insurance companies and different plans. But the employee with health benefits provided by his company doesn’t.

Since I am the human resources manager in my company, once a year I am in the unfortunate position of deciding which of the new plans make the most sense to the company and the employees. I review different plans from different health insurance companies. I calculate and compare the different installment rates, deductibles, co pays, medications, and co insurance. I determine the costs for the company and the risks and costs for every employee.

This all takes quite a while, especially because it is often difficult to understand what the health insurance companies are actually talking about when they write things like “Tier 1, Tier 2, Tier 3 - $10, $15, $30” – up to $1000”. There are so many things not covered by those plans, but it takes time to figure out what exactly.

But there is one thing that stays always the same. Every year every health insurance company raises its rates and lowers the amount of benefits. It is amazing how this is possible. How is it possible that companies that offer fewer and fewer services to their customers survive, but want more and more money, nonetheless?

Andrew and I think it is because there is no real competition for health insurance companies. They don’t have to fight for their customers. The employees are their customers but they are not the ones who have the power to decide whether to stay with this health insurance company or not. They can’t just step away and go to another health insurance company that offers better benefits. There does not seem to be any necessity for American health insurance companies to fight for customers, which explains the paradox of charging more and more money for their plans by offering less and less benefits.

It is really interesting but also frustrating to dig into this topic. And it feels really American.