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How Medicaid can help take a bite out of insurance costs

How Medicaid can help take a bite out of insurance costs

Restaurant owners have a lot on their plates. Economic pressures, minimum wage increases and the Affordable Care Act have restaurateurs hungry for cost containment solutions. Even some of the nation’s largest chains like Quiznos and KFC have closed more locations than they’ve opened in recent years.

Compliance with the ACA’s employer mandate can put particular pressure on profits. Because healthy employees are more productive, reliable and attentive at work, most service employers want to offer their workers health insurance. But with the average annual family premium topping $17,500 in 2016, the costs of employer-sponsored coverage have business owners looking for solutions to help their employees that do not cut significantly into profits.

Fortunately, in 32 states, the Medicaid expansion portion of the Affordable Care Act is helping the hospitality industry thrive. Because the industry’s margins are tight and wages are low, employers appreciate that Medicaid offers affordable, comprehensive coverage to workers with no employer contribution and at little to no cost to the employee.

Today, when restaurant owners offer employer-sponsored coverage, their employer contribution is more than $5,000 per worker per year. But even with business owners contributing about 83 percent of employer-sponsored premiums, many employees can’t afford their shares. The New York Times provided a stunning example of how few employees may be taking coverage options offered by hospitality employers. North Carolina-based Golden Corral franchisee Billy Sewell, for instance, began offering health insurance in 2015 to employees working 30 or more hours per week. Of 600 eligible workers, only two signed up — largely due to employees’ inability to pay for even the plans considered affordable.

Medicaid recipients, though, pay little or no monthly premiums, making them much more willing to enroll in this type of coverage as opposed to forgoing insurance altogether. In fact, Kentucky reported that the number of uninsured, Medicaid-eligible restaurant and food service workers dropped 33 percentage points in the first year after the state’s Medicaid expansion.

When employees have access to care, the whole business benefits. U.S. employers pay $225.8 billion annually in productivity losses associated with personal and family health problems. But when employees are insured, they’re more likely to seek care, take fewer sick days, and stay longer with their employers.

Hospitality businesses thrive when happy, healthy employees deliver positive experiences to patrons. To help eligible employees explore their options under Medicaid:

1. Learn what benefits are available. The first step is learning what’s available to your low-wage workers. Medicaid plans vary by state, as do qualifying criteria such as income, family size, or immigration status. Plans often include dental services in addition to comprehensive individual and family health coverage, all available with low or no monthly premiums, copays and deductibles. Many Medicaid-eligible employees may qualify for other financial assistance, such as for food, energy bills, cell phone and childcare assistance.

2. Clear up the confusion. With Medicaid, low-wage employees don’t need to make choices among food, rent, or medical care. Unfortunately, myths and stigmas continue to mislead those who could benefit from the program. To drive home Medicaid’s value, emphasize that the program serves millions of hard-working employees. Use phrases like “comprehensive coverage for working families” and “low-cost healthcare” rather than “welfare” or “charity care.” Offer direct coverage and cost comparisons between Medicaid and employer-sponsored plans.

3. Make enrollment easy. Most human resources teams don’t have the resources to help every employee explore their healthcare options or calculate whether they’re Medicaid-eligible. And with employees sometimes reluctant to share information about household income or immigration status with their employers, eligibility can be tough to determine. Third-party enrollment services understand eligibility requirements and can offer impartial guidance to help employees claim their Medicaid benefits.

From hosts to line cooks and everyone in between, employees are the key ingredient to a restaurant’s success. To get them the care they need to delight customers, put Medicaid on the table. Employers might be surprised at how popular it can be with their employees.

Benjamin Geyerhahn is founder and CEO of BeneStream. A recognized leader at the convergence of health care and social impact business, Ben is also a member of the Advisory Board of Maxwell Health and a contributor to Forbes and Skoll World Forum.

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