Last week, Wyoming governor Matt Mead signed into law new legislation that moved the Wyoming Healthcare Reform model into Phase 2. We had a significant role in the design of the new model, which connects access to health insurance with jobs and carries a premium that is roughly 30% less than the current Medicaid premium cost the state pays.
Successful implementation of this new model is, at the bottom line, about jobs and economic development in Wyoming. In our small business (less than 100 employees), the biggest check we write every month after payroll is for health insurance for our employees and their covered dependents. Every dollar we spend on health benefits, which is important to our recruitment and retention of employees, is a dollar we don’t have to spend on rewarding good work by our employees or to expand our business. While our health insurance premiums are about 10% less than the risk pool we belong to (primarily because of the business policies we have in place that align incentives around compensation and paid time off), it is still 20% more than the premium in the new Wyoming Healthcare Reform model. The Wyoming model further aligns incentives among health insurance sponsors (employers or government), covered employees and health care providers.
That 20% “extra” cost we pay for health insurance (most of which is incurred by 5% of our covered lives) translates into an annual cost equivalent of nearly 2 full time employees – people that we need to grow our business! That’s more than 2% of our workforce. Applying this formula nation-wide, it translates roughly into 2.8 million1 new jobs that can’t be created because of the “extra” and avoidable dollars spent on health benefits! This is why Wyoming’s model is so important; it will show businesses that with incentives alignment, we can grow our businesses rather than spend extra resources on benefits. Our 40 years of research has shown that incentives alignment results in reduced health benefit costs, and healthier, happier, more productive employees.
Knowing this, who could possibly think that healthcare reform isn’t about jobs and economic development?
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1 Based on 140 million US jobs (2011 Labor Statistics)