In this short presentation, Matt Vaadi explains how a seemingly modest 5% annual increase in health‑insurance premiums quickly escalates due to compounding. Using a low‑end example of a $500/month plan for ten employees, he shows that three consecutive 5% hikes raise the per‑employee cost by $7,881, which translates to almost $10,000 extra per year for the business. He frames this as an "age‑banded treadmill" where premiums keep rising as the workforce ages, warning that the cumulative effect can become a major financial burden as a company grows. Vaadi then promotes an upcoming Thursday session where he will share concrete strategies to break out of this treadmill, control premium growth, and mitigate long‑term risk.
Chapters
All right. So I've been seeing a lot of people over the last couple of years that are pretty happy with a 5% increase in their healthcare expenses. Let's take a look at what that means if your premiums increase 5% year over year and you've got 10 employees. So let's use the very low end of what a healthcare plan costs in premium of $500 a month on average, which once again is at the low for most folks. So if you took a 5% increase in 2022, that would bump up to $5,250, 5% on top of that in 2023, 5% on top of that in 2024. Now you're up $7,881 per employee. So if I take that $7,881 times 10 people times 12, I've got a nearly $10,000 per year increase in the cost of my healthcare premiums. Once again, this seems to be the model that most of us are on is that, hey, 5%, I'm pretty happy with that. Low single digits. That's great. I've seen years where they've been 10%, 20%, 30%, especially when you go back a few years. But now the most pervasive thing about this is, of course, this is compounding interest. So, I've actually picked up another point overall, close to a point as I continue to grow. So, that continues to add thousands of dollars as I extrapolate this out over more employees or more years of increase that I'm taking on because I keep adding 5%, 5%, 5% on top of my base premium, and I'm getting that compounding effect. So, you need to look at ways of getting off this treadmill, getting off the age-banded treadmill, getting off the constant premium increases. And what can you do? Well, on Thursday, we're going to share some great ways that you can get off this treadmill and get onto a more controlled environment and ways that you can look at controlling and mitigating risk over the long term. I hope you'll join us. I look forward to seeing you then.
