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New Developments in Health Care and Why you should shop around!
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Just as the professional trucker, whether it be a company owner, company driver, or owner-operator, continuously looks for ways to reduce the costs of operating their trucks in the obvious ways such as fuel, tires, maintenance, and other large operating costs, they must also be diligent in continuously examining health care costs. This is a large cost that is generally tucked away under the expenditures found in the General and Administrative sections of the Profit and Loss statement, but is an important item, nonetheless.
Over the years, many truckers have generally viewed health care costs as something that was necessary but something they could not control. In the past decade, changes in law and the health care marketplace have changed all that and a new approach must be taken to keep those costs in check.
Whereas before, trucking companies simply purchased an employee health care package of insurance and took what the insurance company gave them and paid the premiums (or the employees paid the premiums), it is much different now. Changes in law have made it possible for many companies to become self-insured, or at least administer the group health care program themselves being able to save some money in doing so. New laws provide for what has come to be known as a Cafeteria Plan, where a company simply chooses from a variety of choices what they wish to have, and, employees who participate are allowed to pay premiums in a specified tax-free manner.
Increasingly, companies are forming employee/management steering groups to review insurance needs and adjust the policies according to the needs of the company. If a driver is asked to serve on such a committee, he or she should jump at the opportunity to do so. There is much to be said for employee involvement in something has a lot impact on their lives.
Over the past few years, insurance providers experienced a flat level in costs as the medical provider industry became involved in the entrepreneurial spirit and engaged in some competitive pricing. Experimentation with health care management organizations (HMO’s), preferred provider organizations (PPO’s), and other such entities did in fact produce some lower health care costs. But that trend is changing again as we see over the past year that medical costs have risen an average of 11% and are projected to rise even more in 2002.
With those increase in costs, insurance premiums are rising and as usual, those costs get passed on to whom? The employee or the policy-holder, of course. Employers are seeking relief from those increasing costs and their first reaction, of course, is to pass them on to the employee. Many times, action is taken to reduce group health insurance costs by raising the deductibles in the policy, eliminating certain coverage such as dental, vision, or prescription drugs. Some of the larger companies are eliminating health insurance coverage for retirees, and smaller companies are eliminating health insurance coverage for employees simply because they can no longer afford them. That puts the burden of health care expenses right back in the lap of the employees.
Increasingly, employees are being forced to spend more money out-of-pocket than ever before. While catastrophic emergencies will generally always be treated at hospital emergency rooms, the same cannot be said for those areas of health care where we spend more of our personal dollars than in any other aspect of health care: dental, vision, prescription drugs, and chiropractic care. And these are areas where truckers and their families can and should use a great amount of discretion in the selection of their providers in these respective areas. There was a time when a dentist, optometrist, chiropractor, or pharmacy simply threw up a sign and opened for business. We went to those people, received our treatment or product, paid exactly what they demanded in fee or price, and considered ourselves to be lucky that they took us at all. These are changing times in America.
Now enters a new player on the health care scene. Medical referral plans are emerging as a new way to develop a network of providers who will furnish their services or products at sometimes very substantial discounts in order to be listed as the preferred provider for a particular plan in a particular area. The public purchases membership in these types of plans similar to what we do when we buy membership in buying clubs, or Sam’s Clubs, or other similar organizations. With our membership cards in hand, we select the provider of our choice, make an appointment, receive the treatment or product, and pay for it with greatly reduced prices (ranging anywhere from 30% to 80%).
If we are going to spend money our of our pockets for these services and products, it would seem to just make sense that we should shop it as hard as we do any other area in the interest of finding the best deal for the money.
In the year 2000, these referral plans grew at a rate of 128% over the previous year, while PPO’s grew at around 21% and HMO’s actually decreased 8.3%. Referral Plans now account for 14% of all medical plan enrollments and will continue to grow in the coming years. We have discovered that it really is true: All things in life are negotiable, even your medical provider’s fees!
So, truckers. Don’t be afraid to dive in and examine exactly what your health care is costing you. Look at all aspects of all your costs to include policy provisions, premiums, and in particular, out of pocket costs. It is an area where you can truly effect some cost reductions which will ultimately, of course, contribute to an improved bottom line.
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