The health insurance burden for small businesses in America has indeed become, beyond any doubt, immense. High premiums, escalating deductibles, and high out-of-pocket expenses for the insured file make it unaffordable for many small businesses to deliver even basic health coverage for themselves and their employees. The complexity of the system makes matters worse and further confuses a business owner when searching for affordable options.
Rising costs of health insurance for small business owners have broader economic implications. They erode profit margins, curtail growth opportunities, and increase the challenges of talent attraction and retention. In any economy where every dollar counts, small businesses are often forced into making difficult choices between offering health insurance or cutting back on other essential expenses.
Fortunately, there are alternatives that are also effective. Such plans include health-sharing plans or medical cost-sharing plans. They are indeed gaining popularity as an option for small business owners who want to provide some kind of healthcare without the hefty price tag of traditional insurance.
Why Health Insurance is Expensive for Small Business Owners
Health insurance over the past couple of years has skyrocketed, particularly for small business owners. One fundamental reason for this is the risk pool. In huge corporations, risks spread over a good number of people, making it relatively easier to control them. Small businesses, however, have fewer employees, making the risk higher per person, thus meaning much higher premiums.
Administrative complexity is yet another reason that brings in a higher cost. Small businesses do not have all the means that big corporations have to make healthcare plans efficient and cost-effective. Thereby, administrating health insurance to employees incurs additional charges and hefty billing for small businesses.
In total, healthcare is becoming more expensive in the United States. Everything – from being in the hospital to prescription medication – is getting more costly. Small business operators, lacking the bargaining power of larger firms, pay more to provide health coverage for their staff.
Affordability and Appeal of the Health Sharing Plan
Health-sharing plans are basically alternatives to traditional health insurance. They might prove to be far more affordable for small business owners. This health-sharing medical care system combines money from members who share costs related to each other’s healthcare. Therefore, a monthly fee is paid by all members, being cheaper than other forms of insurance premiums in the classic sense. When there is, say, a medical expense that arises, the community covers it.
There are several advantages that can be reaped by sharing plans, but the first one is the affordability aspect. Since such plans are not required to comply with all the rules made by a typical insurance plan, they can avoid most of the cost accruals due to the healthcare system. Hence, these plans become much more appealing to those small business owners who try to cut down on their expenses.
While health-sharing plans tend to be more flexible, constraints on which doctors and hospitals you may visit are generally not as severe, and the plans are custom fit for individual needs.
Benefits of Health-Sharing Plans to Small Business Owners
Health-sharing plans stand to provide several advantages for small business owners, ones that surpass conventional insurance. The most obvious benefit is that they tend to be cheaper. Lower payments per month mean that it costs less for small business owners to provide some kind of healthcare for the staff without putting much stress on the finances.
Another benefit is the simplicity of health-sharing plans. For most entrepreneurs and small business owners, traditional health insurance is too complicated to handle- it has its policies and higher associated premiums, and there is always documentation to cope with. Health-sharing plans tend to be less complicated and less red tape-ridden.
Last, health-sharing plans encourage a sense of community. Rather than dealing with an impersonal insurance company, participants become part of a network that helps one another in need. This, within itself, makes for the most supporting environment, highly favorable to small businesses that value personal ties as well as community-related activities.
When to Use Health Sharing Plans?
Health-sharing plans are excellent for small business owners looking for cheaper health insurance compared to the traditional way of health insurance. Such plans are suitable for healthy employees’ businesses since, typically, they do not offer as much thorough preventive care or chronic conditions coverage as that provided by the traditional forms of insurance.
Other health-conscious business owners who desire to experience flexibility in their choice of hospitals and medical facilities and are less bound to restrictions of the traditional insurance networks also find health-sharing plans quite enticing.
However, health-sharing plans are not advisable for all. If your business incurs large healthcare expenditures on most of your employees, then old-school insurance could be a way out. It is pertinent to weigh the pros and cons before coming to the right decision.
Health Sharing Plans: Alternative Solutions
Health insurance is a challenging issue for most US small business owners. High costs impose strain on the finances and curb the growth of a business. Traditional forms of insurance solutions strain budgets and limit business growth, as well. However, health-sharing plans provide practical alternatives by bringing much-needed fiscal relief to manage the same healthcare costs. These plans cannot be said to be flawless; however, they bring in community-based, more affordable approaches to managing healthcare costs.
Disclaimer: MPB.Health memberships are a non-insurance solution designed to provide access to healthcare services. To determine if this aligns with your specific needs, we recommend consulting a certified expert advisor.