Can I Get a Price Check?

Marti Powles, COO of New Benefits

Aug 31, 2015

Can I Get a Price Check?

 A few weeks ago, I was driving home from work when an ad came on the radio. The announcer said, “You wouldn’t purchase airline tickets without knowing where you were traveling and how much it cost. You wouldn’t order a meal at a restaurant before checking out the prices on the menu. You wouldn’t book a hotel room without shopping online and comparing costs.”

It was an ad for a car dealership, but it got me to thinking: Why aren’t consumers doing their research about healthcare costs? Why wouldn’t you compare prices before going to a new doctor or signing up for an expensive medical procedure?

There are plenty of resources available to help employees research healthcare costs. Unfortunately, far too many consumers either don’t know about or have access to these resources.

Ignorance Isn’t Bliss

Two-thirds of surveyed workers said they thought their employers would educate them about changes to their coverage as a result of healthcare reform provisions, according to the 2013 Aflac WorkForces Report. Unfortunately, a mere 13 percent of surveyed employers said educating employees about healthcare reform was important to their organization. 

To make matters worse, Bankrate.com predicts the average household will pay $3,301 in annual out-of-pocket healthcare expenses in 2014. Yet 46 percent of employees have less than $1,000 in savings to tap into for an unexpected serious illness or accident, and 25 percent have less than $500, Aflac reports.

“The bottom line is if consumers aren’t educated about the full scope of their options, they risk making costly mistakes without a financial back-up plan,” said Audrey Boone Tillman, executive vice president of Corporate Services at Aflac.

In the end, this is bad news for the employee and their employer. Financial problems are a major distraction for employees, leading to higher absenteeism decreased focus and engagement on the job.

You Better Shop Around

The goal of healthcare reform was to provide Americans with more healthcare options—but the vast majority of consumers aren’t prepared to take the wheel, and they lack the proper education and guidance to make these choices. Because most consumers don’t know how to price compare medical services, they’re flushing thousands of their hard-earned dollars down the drain. 

For example, the cost for an uncomplicated childbirth at hospitals throughout the New York City area range between $9,699 and $29,076. That’s a staggering price difference! Why on earth would you pay $25,000 for medical care when you could get the exact same care for $10,000? Would you buy a flat screen TV for $2,000 from the electronics store near your house if you knew the exact same TV was available at a store 10 miles away for $750? Of course not! You’d make the relatively short drive to save a whopping $1,250. 

Just like when they’re out shoe shopping or searching for furniture deals, it’s up to consumers to compare prices before they sign on for a major medical procedure. However, it’s up to their employers to offer them the guidance and resources they need to do so. There are many non-insured benefits designed to make employees better healthcare consumers. One example is discounts on prescription drugs.

Get Out Your Umbrella!

If you’ve filled a prescription recently, you were probably shocked by the price tag. U.S. drug prices are on the rise, with some specialty drug prices skyrocketing at extraordinary rates—and healthcare consumers are feeling the squeeze. In fact, a branded drug that cost $100 in 2008 now costs $197.[i] Even generic drugs are getting pricier. Today, more than a third of available generic drugs cost insurers and consumers more than $100 per prescription.[ii]

 Unfortunately, the storm is just beginning. According to a health plan cost trend survey from benefits and HR consulting firm The Segal Group, respondents predict higher trend rates for all prescription drug plans in 2015. 

Darker Skies Ahead

To make matters worse, deductibles are also mounting. In 2015, 32 percent of large employers will offer only high-deductible plans, up from 22 percent in 2014.[iii] Because so many employees fail to meet their ever-increasing deductibles, consumers are forced to pay for high-priced prescriptions out-of-pocket. 

Late last year, I sat in a New Benefits senior management meeting and discovered our company would once again endure a 15 percent increase in premium costs. It’s a harsh reality to face, but we worked together to find the best way to take care of our employees while protecting the bottom line. Like countless other companies, we settled on raising the deductible. Our employees will see a $5,000 deductible for 2015. Yet, many employees will never meet that deductible, which means they’ll have to dip into their own wallet to pay for prescriptions. Fortunately, there is a solution—and it comes in the form of one small card. 

The Silver Lining

Discount prescription cards help consumers weather the storm of increasing out-of-pocket expenses by providing a second option when paying for their prescriptions. As a consumer with a high deductible health plan, I don’t automatically purchase a prescription using insurance. I always present both my insurance card and discount card to find the lowest price because every dollar counts. 

As deductibles and prescription prices continue to soar, employers are searching for creative ways to help their employees pay for medications. If you’re searching for new solutions to offer your employer groups and their cash-strapped employees, look no further than discount pharmacy programs. This one small card is the umbrella consumers need at the pharmacy, and just one example of how non-insured benefits can help employees become smarter consumers of healthcare. 

About the Author

--Marti Powles, COO of New Benefits

In her 20 years with New Benefits, most recently as Executive Vice President, Marti proved herself to be an instrumental leader with an unsurpassed knowledge of the business and its most intricate operations. As Chief Operating Officer, she plays a strategic and global role in developing and securing new business opportunities to further the success of New Benefits. New Benefits is the leader in non-insured health, personal security, financial, travel and leisure benefits. Read their blog here.


[i] Source: Express Scripts’ prescription price index

[ii] Source: Catamaran, a pharmacy benefit manager that administers prescription drug programs

[iii] Source: National Business Group on Health