Three Of The Biggest Reasons Why Employer-Sponsored Healthcare Is So Expensive And What You Can Do About It

On average, employers spend around $15,000 per employee on healthcare. The cost of healthcare continues to rise year after year. As a result, many small to mid-sized businesses are being priced out of the health insurance market. However, offering health insurance is critical to hiring the right people, employee retention, and keeping your staff healthy and productive. Here are three reasons why health insurance is so expensive in the United States.


  1. Redundant And Excessive Administrative Costs

The number one reason why employer-sponsored health insurance is so expensive is because of all of the administrative costs. When you purchase a health insurance policy you incur internal administrative costs, the insurance providers administrative costs, and the medical providers administrative costs. These costs add up and on average 8.3% of every dollar spent on healthcare goes directly to administrative costs.

  1. Pharmaceutical Costs Are Rising

Pharmaceutical drugs in the United States are extremely expensive. This is not just the cost for individuals to purchase the pharmaceuticals they need for their health. This also is the case for medical providers who were paying more for the pharmaceuticals used in care and treatment. These pharmaceutical prices drive up the overall cost of healthcare in the United States.


  1. Not Enough Focus On Preventative Care

American healthcare has created a catch-22. The cost of healthcare is so high that Americans avoid seeing the doctor until their symptoms are so severe they have no choice. As a result, when they do finally see care, the care needed  is more expensive. preventive care on the other hand catches issues in the early stages, providing not just more affordable treatment options but more treatment options.  For example, it is more  to treat an illness early on with a pharmaceutical treatment as opposed to treating an illness in a later stage with surgery.

What Can Be Done To Make Healthcare More Affordable For Employers?

There are a few ways that employers can offset these high tops. First they can find a strategy that reduces the need for administrative costs. Secondly, employers can provide the ability to shop around for the best deals on pharmaceuticals by removing the in network limitations of most healthcare plans. Finally, they can get a healthcare plan that focuses on preventive care rather than emergent care. All of these cost-saving measures can be accomplished with a self-funded health care plan.

At National Insurance Partners National Insurance Partners our team of health insurance experts will help you develop a strategy to keep your healthcare costs down. With a self-funded health care plan you cannot only offer high-quality healthcare to your employees, but at a rate that you both can afford. We offer a range of flexible options that can be tailored to the unique health needs of your staff. To learn more about the cost-savings of self-funded healthcare, give us a call and we will be happy to answer any questions you have and start working on a policy tailored to your business needs.

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