Most companies see their healthcare broker as their expert and product/cost chief negotiator. The reliance of HR teams and senior executives on retail brokers is often so great they have no other source of knowledge regarding alternate pricing for the same plan coverage and best practices for cost reduction.
What these companies might forget is that a healthcare broker is a salesperson working on commission. If you bought cars the same way you buy health insurance, you would ignore the car buying sites on the internet and simply ask the eager dealer, “What car do you think is right for me and what will the monthly payments be?”
The fact is, nobody buys a car without knowing exactly what all the options are. As the buyer, they are in the driver’s seat, not their salesman. Sites like “Edmunds” “TrueCar” and Consumer Reports make getting information that the car dealership might not readily share, accessible so buyers can negotiate with strength and confidence.
It’s amazing that as savvy as people now are in car buying, business owners and department heads can be such easy marks in the healthcare renewal marketplace. Every year millions of dollars are spent with a limited understanding of what premiums are actually paying for and how much of a killing is made in the archaic, expensive, supply chain controlled and perpetuated by the health insurance complex. CFOs and HR heads buying insurance without any true price visibility or understanding are as vulnerable as first time buyers on a car lot who are willing to trust whatever the friendly salesman tell them.
Commissioned retail brokers have limitations. Have you ever talked to salesmen that didn’t know some piece of critical product information that you did? This is true in health insurance as well. DCI has a quiz that our clients can give their brokers to test their knowledge. But don’t be surprised if your broker flunks it or gets mad at you for asking them to take it. Not only are retail brokers limited in their knowledge, they are limited in terms of incentives. Brokers who take their fees from the insurance companies may not be incentivized to get you the lowest premiums.
What Are My Options?
Every option your broker will present begins with one caveat – your coverage will remain the same or increase. Saving on healthcare premiums according to most brokers will necessitate sacrificing on plans or having employees pay a higher portion of premiums. Ultimately these options place employees in the firing line and can have a negative effect on morale. You might even try to negotiate your broker’s commission in the form of a rebate, but this option is rarely successful and always problematic. At most you might save 2%, but this can actually drive premiums up.
There are options that are not readily known by retail brokers, or if known are not presented to their clients because of the lack of incentive. If you are open to exploring options beyond what your broker has to offer with an outside consultant, you might be surprised to learn that you can save up to 30% in premiums without sacrificing on quality.
Let’s Talk Strategy
If you keep doing the same thing you’ll get the same results. Stop settling for minor insights and major costs. Find a resource like DCI that helps you see and drive down the hidden cost drivers inside your healthcare costs. Contact me at (888) 395-0809. Do not be that guy still paying M.S.R.P.