Episode 5: In today’s episode, JP Barta, CEO of The Legacy Benefits Group, discusses a topic that people are asking, “Is Medicare for All Necessary?” JP has a lot of ideas on this concept. He’ll share his perspectives during this discussion.
It’s a complex issue, as are many topics related to health insurance. If we don’t get our hands on this unsustainable system, he thinks it may be an option down the road. He returns to the Kaiser Family Foundation study we mentioned in previous episodes. While the survey results indicated that only 6% of the companies indicated health benefits costs are excessive, he points out that the majority of respondents agree they are in favor of more government involvement in containing healthcare costs.
The irony is that, as JP points out, government may be part of the reason the costs are what they are. There’s almost an incentive for the large insurance companies to want increased costs so they can raise profits, while still complying with the ACA’s 80-20 Rule. In JP’s opinion, there are still a wide range of options businesses should consider, before heading down the path of Medicare for all.
Where is the Money Going?
A 2019 CMS survey indicates that 61% of the overall healthcare spent goes to 3 primary categories: Hospital Care (31%), Physician Services (20%) and Prescription Drugs (10%). The other 7 categories include personal healthcare, nursing care facilities, dental, home healthcare, professional services, non-durable medical products and durable medical equipment.
Pharmacy costs have an interesting statistic. Namely, 50% of the pharmacy spend is for specialty medications. However, fewer than 2% of the US population use them. This single example is evidence that we have many levers to pull before heading toward Medicare for all.
Fraud, Abuse and Waste
These issues continue to plague the system and drive up costs for all of us. Large employers have lobbyist and influence to help shield them from legislation. Unfortunately, the small to medium sized businesses (The Legacy Benefit Group’s primary market) don’t have these resources available to them. Regulation is typically not a solution for those businesses.
Another study JP reviewed indicates that the Medicare system has approximately $60 billion per year in fraud. Medicaid has almost $90 billion in annual fraud (21.36% of Medicare spending in 2020). The National Healthcare Anti-Fraud Association estimates the fraud in private sector healthcare is closer to 3%. It’s a significant difference. A government takeover may not be the best approach.
Providing Solutions to Actual Costs
As a business owner, JP understands that he solution involves going after the actual cost-drivers of the problems we’re now experiencing. It’s the cost of the claims. Better consumer education regarding their benefit options and alternatives is a good place to begin. This is something The Legacy Benefits Group does for its brokers and their employer clients, every day.
As an example, JP’s organization can help to structure employee healthcare plans similar to self-funded (ERISA) plans for small to mid-sized businesses. You’ll have the flexibility to tailor plans and maintain control over costs. Businesses can also leverage direct contract relationships established by The Legacy Benefits Group. There’s a trend toward direct, primary care having specially negotiated rates. Alternatives such as telemedicine and virtual primary care are excellent ways to begin reducing the overall costs of providing quality healthcare. These alternatives exist, but are significantly under-utilized by most patients.
Education Plays a Vital Role
For a business owner or executive, they may already understand how the lack of detailed claims data places him/her at a disadvantage compared to larger employers. However, it’s not uncommon for companies to see claims for the ER, when an immediate care center or primary care physician could have handled the situation at a far lower cost.
Often, companies haven’t implemented effective ways of helping employees to better understand what drives the cost of healthcare for those covered by the plan. It’s a struggle, especially with so many other business objective demanding time and focus.
The Legacy Benefits Group can assist with providing information and helping both the broker and employer to communicate these seemingly complicated issues. Changing behavior is always a challenge, but there are ways to begin attacking it. Education plays a vital role.
In Episode 6, JP will have a discussion with a very successful broker who understands the value The Legacy Benefits Group can deliver. It’ll be a very interesting conversation for employers and other brokers.
Should Government Get More Involved in Healthcare?
JP comments that there are positive and negative repercussions of government involvement. The amount of fraud and the cost of complying with regulations are serious factors. The ignoring of true cost drivers makes it even more difficult. Rather than capping the cost of prescriptions or of hospital charges, the government is mandating the inclusion of expensive, unused benefits. Accountability is often lacking in government-run programs. As a result, the fraud waste and abuse is staggering.
The Legacy Benefits Group is a general agency working exclusively with health insurance agents/brokers. They bring innovative healthcare solutions to small and medium-size employers to change employee behavior, resulting in a change of claims exposure (i.e. cost). It’s a proven, sustainable model that is already working for many businesses.
The goal for the Legacy Benefits Group is to be able to offer comprehensive, major medical coverage without restricting access to quality care. Again, part of that capability is proven by educating people about how to be better consumers of healthcare.
Are You a Proactive Health Insurance Broker?
It costs you nothing to get a quote. It may enable you to offer much needed solutions to your clients and their employees.
Contact Us via Our Website: www.TheLegacyBenefitsGroup.com
Call Our Phone Number: 855-321-0741
Email JP: JPBarta@TheLegacyBenefitsGroup.com
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