Employers Aren’t Finding the Lowest Cost Health Insurance (Guest: Russ Carpel)
Surveys show out-of-pocket costs for company health plans are taking larger chunks out of paychecks. One reason is health insurance brokers have no incentive to find the best deals.
Most employers purchase health insurance through insurance brokers. For their service, brokers earn a commission on premiums. So why would they want to shop for the most affordable plans? Employers usually cover 70 percent of premiums and can save money on their end by cutting benefits and increasing co-pays and deductibles. The difference is made up by the employee. Wages have risen little to compensate for this extra cost. Carpel discusses why health insurance brokers should act more like fiduciaries. Until then, there are options, including self-funded plans with reinsurance and ways to get around the insurance/provider PPO cartel.