If we were able to take a time machine back in time we would see the world of health insurance different than it exists today. As time has gone, the American people have become greedier and have demanded more. It is like giving kids an inch and they take a mile.
Before World War II, most people paid cash for their healthcare. During this time doctors actually made house calls. They would show up with their tool bag and get right to work. Somehow they were able to make a living and put their kids through school.
This was a time when people did not just run to the doctor for every little thing. You would call the doctor to come over to make a house call. Most people let symptoms go for a few days to see if they would go away. There is the possibility they would put some things off that should have been taken care of but most people would eventually call the doctor if the symptoms did not subside. Since most people had to pay for their own health care they were a little more cautious about what needed to be done.
Let's look at auto maintenance for a moment. If there is that 'weird sound' under the hood of your car, you would not just run to the mechanic and say 'there is this noise'. One of the reasons is time but another main reason is because some mechanics will charge a fee to look at the car, as a doctor would. Even if we do get to the point to take the car in, unless you have 100% trust in a mechanic, you will not take their word for it. You will ask other mechanics for a second and third opinion along with an estimate. This will validate that the work needs to be done and at what price.
Why isn't the same thing done today with health insurance? There are many reasons for this. One in particular is 'Greed'.
After World War II a rate freeze was enforced throughout America. The federal government decided to give a tax incentive for employers to provide health insurance for their employees. Since business owners were in competition for employees they decided it was a good idea to provide health insurance benefits.
As time went on the insurance companies became wiser at increasing revenue. By increasing the benefit, the insurance company can increase the premium for each employee. At this time it was very affordable. The employers decided to offer the increased insurance benefits for employee retention. This new richer plan, if you will, gave an incentive for employees to actually use the plan. After all, why not, it was not costing them much of anything.
Employers at this time were paying most, if not all the premium. Employees simply did not have enough 'skin in the game'. No cost sharing of benefits is like giving a 16 year old a car with no responsibility. Someone can get killed! Now every ache, pain, sniffle or the latest greatest pill was a reason to run to the doctors.
When you have an overuse of a system, due to an incentive to actually use the benefits, this creates scarcity. It’s simply a supply and demand ruling. This use, or abuse, of the system forces the premiums to rise more and more each year.
Now let's fast forward a few decades. Employers are now faced with a problem. They want to provide health insurance for their employees but the cost consistently receives double digit increases every year. Employers have to be careful about how they carve out benefits of the policies to make things more affordable. This could potentially lose good employees. For years most employees had rich health insurance benefits at little or no costs and they came to expect to have these benefits. Many employees forgot what it was like to pay for their own healthcare services. This is what many would call greed. Greed that is either good or bad. Greed, in a way, makes it harder to scale back on health insurance benefits as the cost keeps rising higher and higher at an even more rapid pace. When will some employers pull the trigger to do something about it?
Many employers are in the same situation. There are several techniques available, and with the right guidance and tools, you can decrease your cost thirty to sixty percent while increasing the employee's coverage. Life today is not the same as it was 50 years ago. The same goes with health insurance. Moving ahead in the future, away from greed, can not only save coverage, but increase the coverage for all employees. By making these changes, business owners can move to a more profitable business to allow them to expand and become stronger in their market place. If greed continues to be in the way, it could leave a business to close it's doors all because of healthcare. Where do you want your business to be?
Butch Zemar
Elite Benefits of America