The Only Number That Matters: Shedding Light on the Loss Ratio Illusion | Employee Benefits

June 13th, 2025

Louis C. Bernardi, “The Benefits Whisperer”

💥 Certified Healthcare Fiduciary Coach and Health Value Advisor 💥 I work with Business Leaders of mid-sized

Did you know that optimizing your healthcare plan can contribute directly to your company’s survival and growth?  ✨ When we compare the benefits of healthcare savings to findings from a recent college essay, “Ten Reasons Why Companies Keep Failing,” the connections are clear. Let’s explore how healthcare optimization addresses these pitfalls:

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If you’ve ever sat through a renewal meeting with your insurer or benefits broker, you’ve probably seen the chart: a tidy little box showing your loss ratio—the percentage of premiums spent on claims over the past 12 months.

It feels logical. Familiar. Almost comforting. But it’s also a sleight of hand.

What Is a Loss Ratio—and Why It’s a Distraction Let’s say your company paid $2,000,000 in premiums last year. The insurer paid $1,500,000 in claims. That’s a 75% loss ratio. Sounds efficient, right?

Until they layer on a 10% medical trend. Then add pooling charges. Administrative fees. Commissions. Premium taxes. Oh—and margin. Can’t forget the profit.

And just like that, you’re told your premiums are going up again. And yet, no one ever stops to ask the one question that really matters:

What did we actually buy with that $1.5 million?

The Real Question The entire focus is on how much was spent—not what it was spent on. That’s the trick.

Loss ratios don’t show you:

If you overpaid for prescriptions by 500%
If your members were steered into low-value, high-cost hospital systems
If you had options that could have delivered better outcomes for less money

They just show a tidy percentage—like a magician showing you one hand while hiding the real trick in the other.

Here’s the Truth: Employers aren’t just buying insurance—they’re financing their employees’ healthcare decisions.

If you want to spend less on insurance, you must spend smarter on healthcare.

That means asking your broker or advisor:

What are we doing to optimize claims?
How are we helping employees identify the highest-value care?
What tools or data do we have to spot inflated prices or wasteful utilization?

The good news? This isn’t a fantasy. With the right tools and partners, it’s not only possible—it’s being done today by forward-thinking employers across the country.

The lights are already on. You just need someone to hand you the switch.

🔦 Ready to stop being distracted by loss ratios and start reclaiming control? Let’s talk. There’s a better way to manage your health plan—and it starts by seeing through the smoke and mirrors.

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Questions? Contact the author at [email protected]

Schedule a call at calendly.com/lcbernardi

Visit our website at www.britepathbenefits.com