In Texas, healthcare expenses are pushing business to a breaking point.
Healthcare expenses have been growing at unrelenting rates for decades. And not only are prices continuing to rise, they’re doing so at a rate faster than expected.
Last fall, the global consulting firm Mercer projected that the total health benefit cost per employee was expected to rise at the fastest rate in over fifteen years. Now, Mercer’s analysts are saying that those projections appear to have underestimated the rate of growth.
“It’s unsustainable,” John Tournet, the U.S. CEO of Gallagher’s benefits and HR consulting division, said of rising healthcare expenses. He added that the “old ways of doing things” — such as raising both premiums and deductibles each year for employees — are equally unsustainable.
While the problem is national in scope, the impacts are being felt by business owners and their employees here in Texas.
“Every year, it can change on you in a heartbeat,” Kyle Citrano, whose family runs George’s, George’s #2 and Jorge’s Cantina, told The Texas Tribune. “You could have your rates jump because your participation is down, someone on your staff could get hurt. You never know.”
And it’s not just private businesses that are getting hammered by high healthcare expenses. Taxpayers are paying more every year for public employee benefits, like those available to teachers and firefighters.
According to the Texas Tribune report,
Excluding the pandemic years, the Texas state government, a major employer, has seen year-over-year increases in health costs between 3% and 9.8% since 2014, according to the Employee Retirement System of Texas which provides benefits to current and retired state employees.
Experts and employers that spoke with The Texas Tribune said these rising costs for employers shrink the pool of money available for labor, causing employees to miss out on raises and making it harder to hire new employees. Rising insurance costs that get passed on to employees can price some of the lowest paid employees out of health insurance plans altogether, affecting their access to preventative health and risking their work productivity.
Thankfully, the Texas Legislature is preparing to take up healthcare affordability during the coming legislative session, and is already holding hearings on the matter.
As the next legislative session approaches, Texas Employers for Affordable Healthcare will continue to work with state lawmakers to make sure the voice of Texas employers is heard at the state capitol.