As budgets tighten and inflation rises, it’s understandable to have concerns about health insurance premium increases in 2024. More than ever, churches and ministries are working to maximize resources and make wise financial decisions, including health care coverage for pastors, church staff and employees.
As one of the nation’s largest infrastructures, health insurance overlaps with many other industries, including the financial markets, pharmaceuticals, general health care and government-funded programs. Because these industries are connected, health insurance is impacted by the same challenges, such as:
In fact, according to Aon plc, a leading global professional services firm, average costs for U.S. employers that pay for their employees’ health care will rise 8.5% in 2024.2
While these statistics tell a story of the insurance industry at large, they don’t focus on the creative solutions available for health insurance for nonprofits. And that’s the story — and the reality — that we’d like to share. We keep our pulse on these issues and have been working behind the scenes to strategically keep your costs low for ministry and church health coverage plans.
To understand and maximize the solution, we must first address the challenges head-on.
We’ve identified six factors that we believe are contributing to the rise in health insurance costs:
In 2020, the beginning of the pandemic triggered an unbalanced supply chain, staffing shortages and unruly production costs. These factors contributed to inflation which led to higher costs for health care services. Inflation has reached an all-time high that hasn’t been seen since the 1980s.3
However, many hospitals and providers were locked into fixed health care contracts no matter what was happening with rising inflation. Now, as many of those contracts have been fulfilled, providers are currently negotiating at higher rates to help them recover their losses from inflation — which gets passed down as price increases for individuals.1
With the pandemic largely behind us, the use of health care services has increased as individuals return to routine doctor visits and feel safe checking into hospitals.
Recent data on the increased use of services shows greater use of diagnostic tests and treatments.4 As a result, providers are under “increased regulatory scrutiny” for required diagnostics documentation. This regulated environment requires overhead and administrative costs4 to maintain compliance with Protected Health Information (PHI).
Renegotiated provider rates, hospital acquisitions, physician consolidations and staff shortages have driven the average wage of health care workers upward.1,4 These residual effects of the pandemic all contribute to health insurance premium increases in 2024.
As medical technology continues to be leveraged to improve patient outcomes, the initial costs come with large price tags to kick off research and development.4 Providers feel pressure to keep up with these advances to offer the best care and be competitive amongst industry peers.
New drugs exist in the market for an average of 15 years without competition from generics.1 The median prices of newly marketed drugs skyrocketed in 2020 and have continued an upward trend,5 causing church health insurance plan providers to factor these prices into cost structures.
Improvements in modern medicine cause the average age of the population to increase, leading to more people insured by Medicare and Medicaid. These government-funded programs continue to limit reimbursements to providers, who often pass those costs along to patients.4
In addition to living longer, our aging population — even if not yet on Medicare — is going to the doctor more frequently and experiencing more chronic conditions than previously seen.
Health coverage providers can take steps to offset health premium increases, leading to more affordable premiums. Since premiums are primarily determined by claims plus fees, providers and plan administrators have the ability to use cost management to help keep rates lower for everyone in the plan. Cost-reducing actions include:
Claims result when members utilize providers and procedures offered through their medical plan. Providers can take steps to limit the risk of unexpectedly high claims by establishing networks of providers, such as a PPO, who agree to provide services for a predetermined amount. Providers may also offer plan options with coverage limited to only in-network providers, such as an HMO or EPO, to further protect the plan from high claims.
Carriers can implement educational programs to help members make informed decisions that directly impact claims, including the use of in-network and lower-cost providers. For example, using a primary care provider instead of an urgent care facility or emergency room when appropriate can significantly lower the claim amount the plan needs to pay, helping costs stay lower for everyone in the plan.
A portion of the monthly premium covers the provider’s administrative costs to manage the plan. Providers can implement processes such as evaluating vendor costs against the market to ensure they are wise stewards of the premiums they have been entrusted with.
Built to serve those in the nonprofit and church space, GuideStone® works diligently to help mitigate the effects of health care inflation. We’re passionate about this work because even though wellness and resilience benefit anyone, they are uniquely consequential for those who have devoted their lives to serving the Lord. GuideStone guides our ministry partners and members along an affordable health care journey with the following products and strategies to keep costs low:
GuideStone has plans to meet many unique budgets and health care needs, from a small church staff to a large ministry partner and everyone in between.
An expansive nationwide network of providers makes it easier for members to find affordable in-network care. Members save with pre-negotiated rates for physicians and procedures that keep costs low.
Members are provided with tools to engage with a personal care coordinator, find the best pricing on procedures, take advantage of elective incentives and gain control of health habits with the programs built into plans at no additional cost.
To help combat the rising costs of prescription medications, GuideStone has implemented valuable solutions to help members save.
Our health plans include global coverage, so members are not required to purchase a separate policy when going overseas for missions or a vacation.
GuideStone works to keep administration fees well beneath the industry average while stabilizing pricing. We implement fraud, waste and abuse management practices to protect the plan from unnecessary high costs and activity that unfairly takes advantage of the plan, resulting in higher costs for everyone else. GuideStone also regularly evaluates vendors and program costs to ensure fair market pricing.
GuideStone leverages decades of experience and expertise to educate and guide members through their health care decisions, leading to reduced costs. As an advocate who understands and embodies the same values, members can rely on GuideStone for principled employer and church health plans.
GuideStone strives to offer competitive rates for 2024 and beyond to equip our members and ministry partners to lead resilient lives and advance the Kingdom of God. Reach out for a health plan quote for your team today.