The Oxymoron of Healthcare Costs? The More We Pay, the Worse It Gets.

Before joining Imagine360, I spent 30 years working as a broker, observing the evolution of the healthcare industry. Although healthcare innovation typically moves at glacial speed, the recent national focus on healthcare costs and the resulting shifts in public sentiment will permanently change how brokers operate.

PwC reports that families will pay more for healthcare this year than they have in the last 13 years. In fact, with a median American salary of $48,000 and an average out-of-pocket cost of around $5,300 for an employer-sponsored health plan, employees are spending nearly 10% of their pre-tax annual salary on healthcare alone in emergencies. It’s not sustainable.

To help better understand how American workers feel about rising healthcare costs, Imagine360 recently conducted a survey asking 2,500 Americans how they feel about their healthcare coverage, and the issues we hear about a lot in healthcare like cost, transparency, and access. The results were both revealing and alarming:

• More than a third of respondents skipped or postponed necessary healthcare or medications due to costs—of them, 42% had their medical conditions worsen.
• Health plan premiums are the number one factor causing difficulty in affording healthcare, followed by out-of-pocket maximums.
• Affordable and quality health benefits are key to employee retention, with more than a quarter stating they would take a pay cut at a different job if it offered better health benefits.

Looking at these findings, I can’t help but ask: How did we get here?

There’s no single answer, but having served in this industry a long time, I can tell you that most employers are focused on running their business and don’t know that there is an alternative healthcare solution.

At the same time, too many brokers have accepted rising healthcare costs and take minimal effort to control them. They go along with the status quo, rarely questioning traditional health plan carriers. Simply switching between carriers to dull the pain of an outrageous renewal is no longer an adequate, nor sustainable, solution. But this complacency goes far beyond brokers retaining client’s satisfaction and maintaining their book of business— our work directly impacts American businesses and families.

A separate Gallup survey found that 30 million Americans borrowed an estimated $74 billion for medical bills last year. Healthcare shouldn’t be so expensive that one in ten people can’t afford it. The fear of medical debt plagues households of all incomes. Even 16% of households earning $180,000 or more worry a major health event could leave them with medical debt.

This is the paradox of healthcare: people go to the doctor’s office to get better but end up suffering because of how much they are billed. That suffering isn’t just financial – it’s emotional and mental. AIMS Public Health found that individuals with medical debt are three times more likely to experience depression, anxiety, or stress. It begs the question: Is healthcare improving the lives of Americans, or making them worse?

With costs continuing to rise, the consequences for families will be catastrophic. If that doesn’t serve as a wake-up call for employers and brokers, I’m not sure what will.

Brokers and consultants must act now. Employers need support and look to brokers to provide the guidance and affordable solutions they need.  This isn’t just about incremental cost-cutting; it’s about transformational change and offering meaningful benefits to employees.

At Imagine360, we address healthcare affordability head-on through preferred physician contracts and reference-based pricing (RBP), leading to 20% cost savings. In September of 2024, Aon and Imagine360 released a white paper showing that two customers using RBP saved $37.2 million compared to projected carrier expenses. Those savings can then be reinvested back into employees, making healthcare more accessible and affordable, maximizing what benefits should be.

The best brokers know that valuable benefits that employees can use and afford lead to more satisfaction, and the owner of a mid-size brokerage in the Midwest recently told me that 100% of his clients using Imagine360 renewed in 2024 due to their ability to reinvest in their employees. By making a transformational change with Imagine360 and focusing on the true needs of clients, this brokerage has effectively improved retention and accelerated growth extensively.

What’s next:

A simple search in the Merriam-Webster dictionary defines healthcare as “efforts made to maintain, restore, or promote someone’s physical, mental, or emotional well-being.” If we keep this in mind when reflecting on the current state of the industry, we as trusted advisors (myself included) can make a greater impact by supporting Americans.

Rest assured; not all hope is lost. There are immediate actions that we can take to improve healthcare affordability. I urge brokers, benefits leaders, and employers to seek health plans that deliver savings and a meaningful impact to all facets of healthcare.

While the survey found that a quarter of individuals would accept a pay cut for better health benefits, they shouldn’t have to make that choice. The brokers who step up and make changes will be the ones leading the industry in the next five to ten years.

I am happy to share more with brokers and consultants across the nation. Please message me if you would like to learn more about cost-containment strategies that can help grow your book of business while improving retention.