Mythbusters: The benefits industry tackles its biggest misconceptions
We asked readers to share the biggest myths they see in the health care and benefits industry. Are you guilty of believing any of them?
My broker knows what they’re doing
From my perspective as an employer, the biggest myths I see are:
1. My broker is working for me. In fact, their contract, compensation, etc is all with the insurance carrier.
2. My broker has brought me all of the options to review. Some are not brought due to lower commissions. Some are not brought due to the brokers not getting outside of the BUCAHs to see what else is going on.
3. My broker knows what they are doing. I met a broker who was selling Jimmy John franchises two months prior to becoming a broker. To think this guy can help lead a multi-million dollar negotiation out the gate is crazy. The team is only as good as the weakest link.
4. Everyone seems to think it’s the other person’s fault in the system. The reality is the whole system is messed up and everyone is just maximizing their own self-interest. It’s not wrong; it’s what we all do. We need to change the system.
Steve Watson, managing director, Summit Path Group
Synonym or antonym?
Health care and health insurance are the same.
Chris Corkran, national sales director, National Insurance Partners
The government will save us
Medicare for All/single-payer will solve the health care/insurance crisis. Considering the issues we’ve seen with quality and operating within budgets from some large governmental institutions, private-sector ingenuity and innovation are more likely to provide the needed solutions.
Michael Naumann, worksite practice leader, Western US, Guardian Life
Obamacare is dead
The biggest myth people believe is that Obamacare (or the individual mandate) has been repealed. They don’t realize that individuals are still required to have health insurance, and that it was the penalty for not having coverage which was removed.
Some employers mistakenly believe this means they don’t have to prepare their 1094/1095 filings. They find out they are wrong when they receive a Letter 5699 from the IRS.
Benjamin Davis, VP, Diversified Administration
Costs can’t be addressed
I think the biggest misconception is that companies can’t do anything to control health care costs. The problem is complex and multi-faceted, but costs can be addressed.
Doug Morse-Schindler, president and CEO, HealthJoy
Carriers care about costs
In a post-MLR world, the only way publicly traded carriers fulfill their legal duty to maximize profits is if health care costs to go up.
Here’s another: If a new drug is approved by the FDA, it was tested on thousands of people, will improve quality of life more than older drugs, and will be more cost-effective than other drugs on the market.
Reality: People tend to think that FDA “approval” equates “endorsement.” The standard for FDA approval is that the drug does what it claims and benefits exceed harms for some patients. The days of new drugs being miracle cures are far behind us. Only one disease (Hepatitis C) is now cured by a drug that wasn’t available 10 years ago.
Dave Chase, creator & co-founder, Health Rosetta
Cost=quality
The biggest misconception in health care is the inverse correlation between cost and quality of health care providers. Higher cost does not mean higher quality and higher quality does not mean higher cost.
Taylor Y. Lindsey, partner, Employee Benefits Consultants, Inc.
Self-funding salvation
That going self-insured is a good idea. It’s like being in a drought and responding to water rationing by digging your own well. It’s modern-day feudalism, where the companies with means gain even greater advantage over companies with limited means. Any solutions to our health care crises don’t involve fractionalizing it even further. They require making the most of massive risk pools to bring down administrative burdens while freeing up companies to focus on real, scalable innovations to further transform the system.
Shandon Fowler, founder and principal, Four8Insights
Costs must rise
Health care costs “just go up.” As if it’s inevitable. It’s a daily battle to combat this myth.
Cristy Gupton, founder and president, Custom Benefits Solutions
Bigger is better
That it can’t be done better for less than the BUCAHs because they are huge.
Judi Braswell, VP, business development, Behavioral Health Systems
You don’t have to pay
Have you ever heard a health care provider say, “Its OK, this is covered by your health insurance”? Someone has to pay that bill and it ultimately impacts us all.
Jeff Walter, chief information officer, Professional Benefits Administrators, Inc.
Who’s to blame
Health care inflation cost drivers. I think people unjustly point the finger at publicly traded insurance company CEOs, brokers, consultants and physicians. While each cog of the wheel certainly equates to a percentage of every health care dollar spent, drastic inflation, I believe, is in large part due to hospital system consolidation and big pharma. The increase in costs associated with these items simply gets passed along to the consumer via insurance premiums.
Ben Crowder, vice president, Cornerstone Insurance Group
I’m invincible
The biggest misconception is that employer-sponsored group disability insurance coverage isn’t needed or necessary—whether it’s employer paid or voluntary. Particularly, long-term disability (LTD). What some workers don’t understand is that their most valuable asset is their ability to earn. Coverage is affordable and saves houses, protects dreams, and gets injured workers back to having a productive lifestyle.
Dan Aiello, regional vice president group sales and service, Northern Region, OneAmerica®
There’s power in numbers
Business owners often assume that if their company were bigger or combined with a bigger group, their rates would be cheaper. While we know that larger numbers help spread the risk, that doesn’t control the demographics and health risks that exist within that larger population; thus, the premiums could actually be higher.
Tammie King, principal and senior client executive, OneDigital Carolinas
Benefits are an expense
Employers still think of benefits as a liability on the balance sheet, rather than looking at how they can strategically contribute profitability to the bottom-line revenue of the organization.
Based on how employers set up their premium contributions to high-deductible health plans and whether they help offset the higher deductible, this concept can be beneficial for everyone—not just healthy people. There is an opportunity to implement these plans, which typically drive a lower premium and allow employers to save premium dollars, and fund an HSA or HRA while keeping the out-of-pocket expenses lower for employees.
Kevin Reid, managing consultant, OneDigital Mid-Atlantic
You’re locked in for a year
MYTH: We can only change plans during our open enrollment.
FACT: You can move anytime—especially if it saves money!
Craig Becker, benefits consultant, Becker Consulting
Insurers are on your side
That health insurance companies are negotiating for you to ensure that you are getting the best quality for the best price. People believe that without the insurance company helping, you’ll pay too much at the doc, the hospital, the labs, the pharmacy, etc. It’s mostly, but not completely, untrue. Direct primary care is an example. DPC docs negotiate for our patients and very often get better prices on primary care labs, imaging and most medicines. If the law would allow physicians to own hospitals, we could get better prices on that as well.
Kevin McGann, MD, owner and founder, Family First Direct Primary Care
Self-funding is about cost control
Myth: Employers self-fund so that they can control cost.
This is incorrect, as every employer under a carrier ASO agreement agrees to open up the bank vault and allow money to be withdrawn without proof or evidence that a service occurred. Brokers roll over for their commission and ignore ERISA risk. Employers solve the problem by passing the risk back down to employees, who are expected to carry the burden of a broken system. Why would any reasonably intelligent person sign an agreement that gives you zero control and exposes your company to unlimited risk? Let’s stop dancing and demand change. The key is in the data.
Dawn Cornelis, co-founder, ClaimInformatics, LLC
BUCAH knows best
MYTH: The BUCAHs are using the best analytics to identify FW&A for self-insured employers.
FACT: Self-insured employers are losing between 5 percent and 10 percent of their annual spend and have no idea. SOLUTION: Bring on a proven independent watchdog to ensure all claims approved and paid by the ASOs are legitimate.
Massie Meredith, senior VP, business development, 4C Health Solutions
Insurance is a free health care spending pass
One of the most devastating and costly myths impacting consumers of health care is that health insurance is the same thing as health care. It’s understandably confusing for most folks outside of our industry thanks to industry jargon and media misconceptions.
The mindset of “I pay a ton for my insurance so I’m going to get my money’s worth” can lead to overuse, unnecessary spend, waste, and compounding complications down the road. Our system would be better if all parties involved admitted and understood that the size and frequency of claims impact what you pay out of pocket for services as well as what you’ll pay for premiums at each renewal! Compounding is great for our investments, but bad for our medical premiums.
Joey Bickley, health care purchasing consultant, Bickley Insurance, Inc.
We’re number 1!
The single biggest myth we hear every day: this hospital/doctor/facility is “the best in the country.” They may have the biggest marketing budget, but at least 50 percent of the time, when you look at the objective quality metrics, that perception proves to be false. It’s especially interesting when it is a health care professional who has the (mistaken) perception! The close runner up is “The most expensive place must be the best place.” False!
Deb Ault, president, Ault International Medical Management
Costs are too complex to sort out
The biggest myth is that price transparency and pure consumerism isn’t possible. Once we get there, we will see the system start to become “unbroken.”
Sean Glavin, VP, employee benefits, USI Insurance
Wellness is a sure-fire investment
Employer Myth: Wellness is a critical part of our strategy to get our employees healthy and lower cost. Future health care costs are unknown, so it will always be a gamble.
Marcy Heath, health care strategist, Inoventive Solutions
There’s nothing employers can do
That the procurers of their second biggest line item are trying to help them lower the amount they spend on said line item. Most decision-makers for employer-sponsored health plans have no idea how bad the deck is stacked against them. The best part is when you show them other options to align incentives and they still refuse to try something different. I actually blame the employers. It’s not Washington, or the hospitals, insurers or PBM’s fault that employers continue to get punched in the face and keep coming back for more.
Zachary Jones, senior sales executive, ScriptSourcing, LLC
Health insurance protects
The myth is that health insurance protects. Yet, 70 percent of medical bankruptcies have health insurance. Over half of employees can’t afford their deductibles and copays, so they don’t use the insurance. Most can’t access $1,000, yet the average deductible is $6,500. Employers and their insured employees have been stretched to the breaking point.
Ron Barshop, CEO/founder, Beacon Clinics
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