The Crystal Ball – Predicting Medical Costs

By Michael Rozum, Advisor at acumen

Wouldn’t it be nice to have a crystal ball to predict the future of your medical needs for the upcoming year? And to be able to gaze into it just before your open enrollment begins each year? For both individuals and families, having the best health insurance plan for your needs is vital to financial stability.

Employers struggle with this concept every renewal when determining which benefits to offer employees for the new plan year:

  • Do employers pick a plan that works for a vast majority of the population? Most employees use their insurance sparingly or for only basic services. These plans can be relatively inexpensive, but have a higher deductible and out-of-pocket maximum. They can provide nice benefits for day-to-day needs but employees that need insurance for planned (or unplanned) major events are often footing a very large bill and the benefits are perceived to provide little-to-no value. Or;
  • Do employers cater to the smaller population of employees to protect them from those very costly events and procedures? In doing so, employers provide employees with a really great benefit should they need it; but it also results in over-insuring a large percentage of the population. In other words, they overspend on health insurance.

In a perfect world, if the employer knew who would need the health insurance for something major, they could select a rich plan for those employees while simultaneously providing basic coverage for the other employees and avoid overspending on them.

Using our proprietary analytics tools, acumen helps employers predict future medical costs and monitor actual expenditures throughout the year to ensure the year’s plans are on track. Both the employer and employee can have peace of mind knowing the organization is providing the right amount of coverage for every employee without overspending.

For more information, please contact acumen today!