Texas businesses, such as restaurants in Waco, are struggling with rising healthcare costs, which are straining their operations and affecting their employees. Kyle Citrano, co-owner of three restaurants in Waco, said that providing employee health insurance has become a significant challenge.
Rising Healthcare Costs
The health insurance costs for Citrano’s business have risen about 5% since reopening from COVID-19 shutdowns. This increase is due to the need to share the burden with employees by passing on higher premiums and deductibles. The Texas Legislature is seeking solutions to address the rising healthcare costs, which are affecting businesses and employees across the state.
Experts say that consolidation in the healthcare industry, such as among hospitals and companies acting as middlemen between providers and employers, is driving up insurance premiums and the cost of health services. A lack of transparency around how providers, insurance companies, and other industry players set prices for medical care and prescriptions makes it harder for patients and employers to negotiate the best price, further raising costs.
The Texas Hospital Association argues that industry consolidation helps keep hospitals open in areas where they are struggling financially by allowing hospitals to pool resources. However, hospitals face their own rising costs, including insufficient reimbursement from health insurance and steep administrative burdens.
Impact on Employees and Employers
Rising healthcare costs are not only affecting businesses but also employees. Amy Hartman, Senior Manager of Human Investments for Texas-based credit union Credit Human, said that healthcare costs are rising faster than any other expense at the company, including wages. This is harming both the business and employees’ bottom line, as higher health insurance premiums eat up the extra pay employees receive.
Citrano’s business is also experiencing low employee participation in the health insurance plan, which results in higher rates for the employer. Only 19 employees have opted into the health insurance policy, despite offering good coverage for the overall younger employee pool.
Experts and employers agree that the lack of transparency around healthcare costs is a significant issue. Hartman said that it took two years of requests to get access to data from their claims administrator and pharmacy benefit manager. Without this information, employers are unable to find the best deal that meets the unique treatment and financial needs of their employees and makes business sense for their company.
Original reporting: Texas Tribune (HLL/CB) — read the source article.
