Ingrams June 2023

with their health status. The biggest factor influencing rates is age. You can have rates three times higher for someone at age 59 than someone who is 24. That has hurt a lot of groups, and that’s why carriers got creative with level-funded plans, call it self-funded-lite, where they put bumper guards around plans to protect against a catastrophic financial blow. Carriers have done a lot to sidestep restrictive underwrit ing requirements; if the work force has an average age of 45 or 46, and you took the ACA rate, that insurance would be extremely expensive. Something else that has helped employees is the affordability rate. There’s a cap the IRS sets every year that limits how much employees have to pay for health care, and this year’s it’s 9.12 percent of household income. Q: So how is all of this shaking out for small business owners, in particu lar, as they struggle to retain this vital employee benefit? BUKATY: They are certainly going with higher deductible plans and those with higher out-of-pocket expenses. A lot are getting away from the traditional PPO and going with a high-deductible plan they can integrate a health-savings account. We shop our clients’ business every year to make sure there’s not something out there cheaper; if we can save 15 percent from Carrier A to Carrier B, we do that home work for clients. We’ll always give the incumbent carrier one last look, if they’re asking for 15 and the other guy is at 5, can you meet me at 10? That’s what employers are doing, but they say, “I’ve been with my carrier forever, but can you kick the tires for me with others? I’m willing to do what ever I have to do to keep costs in check.” AMUNDSEN: There is a move to consumer engagement and price transpar ency. Carriers have adopted this approach, as well as new market entrants. Blue KC has its Smart Shopper program, where you can go online and look at doctors in your area code that do knee replacements, for example. Maybe eight or nine will pop up, and two or three will be low-cost or best cost with good outcomes. If you go to him

vs. someone not doesn’t have that green tool indicator, you get money back in your pocket. That gets more attention than just “here’s a low-cost provider.” Q: Tell us about the transparency advances. BUKATY: The transparency tools are very cool, they are sophisticated, and carri ers are now rewarding employers who use them. But those companies are making it work. They’re not taking away other ben efits to pay for health coverage. If anything, they might be adding some second-tier benefits, like short-term disability or acci dental death coverage. AMUNDSEN: Costs are rising, but you have to remember that we’re in one of the most challenging times ever to hire and retain people. The benefits aren’t the over arching reasons that someone goes to work for a company, but they are looking at pay and benefits together. Employers know that to remain competitive, they have to offer a quality health package. Q: The roots of that benefit go back to the World War II era, when employ ers limited in their ability to raise wages began offering health coverage as an inducement for talent. Was that a stra tegic mistake that needs to be unwound? AMUNDSEN: I don’t think it was a mistake at all. The ACA gives everybody the opportunity to have health coverage, and some people can get it for zero dollars with the subsidy. Yet we still have 9.2 percent of the population that doesn’t have health insurance. In the workplace, more than 50 percent are getting it from their employer. If everyone were left to their own devices, you’d probably see rates of the uninsured go up significantly with people not having this basic understanding of the decisions they are making. I don’t always say if it ain’t broke, don’t fix it; there may be things that need to be looked at and that’s why we see transparency and consolidation of coverage in the industry. Industry, government and employers are working together, and they have to continue to do that to keep a lid on costs.

Q: So as we look at overall costs for coverage a decade after its passage, did the Affordable Care Act deliver on its promise to rein in costs? BUKATY: Our personal belief is that, no, it hasn’t. Let me give you some stats: About 90 percent of our groups here, maybe 95 percent, are on underwritten platforms. We go to carriers with a busi ness plan, they get a chance to assess the risk factors and give us a price. The price we get 95 percent of the time is cheaper than plans established on the ACA, or the exchange. If 95 percent are getting a better deal with underwriting, those 5 percent, the higher risks, if you bring them back into the pool, I think you see more level ing out of premiums. AMUNDSEN: Of course, ACA rates apply to groups under 50 people, but the underwriting formula has nothing to do “It’s not the nickel-and dime claims catching up with carriers.” — Mike Bukaty, Chairman/CEO, Bukaty Companies “Employers know that to remain com petitive, they have to offer a quality health package.” — Mary Amundsen, COO/Managing Director

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Kansas City’s Business Media

June 2023