For too long, health plan selection has been treated as a yearly renewal decision, focusing on short-term rates instead of long-term financial sustainability and care quality. But a health plan is more than an expense – it’s an investment.

Think about how you approach a 401(k) plan – you wouldn’t pick funds based solely on the lowest short-term costs or the widest range of options. You’d look at which investments create the most value over time, how they manage risk, and whether they align with your financial goals.

Health plans should be evaluated the same way. Instead of shopping for the lowest renewal rate or the broadest network, employers should be asking:

  • Does this plan create long-term savings to reinvest into better care?
  • Am I paying for real value or just shifting costs year to year?
  • Do I have the data needed to manage costs effectively?

A smarter health plan isn’t about cutting costs at the expense of care – it’s about optimizing spend, aligning incentives and ensuring employees get the right care at the right cost.

Myths debunked: The truth about health plan selection

Myth #1: The best health plan is the one with the lowest current rate

Reality: Employers who focus only on this year’s premium often overlook hidden cost drivers. Opaque pricing structures and rising out-of-pocket expenses can make care unattainable for employees.

✔ A better approach: Evaluate how the plan is structured for long-term cost control. Look for plans that allow you to reinvest savings into better care for your employees, not just lock in rate hikes regardless of claims performance.

Myth #2: Better value comes from broader access

Reality: Large, unrestricted networks often lead to higher costs, fragmented care, and overutilization of expensive providers. High-cost claims to expensive health systems result in increased costs, without necessarily improving outcomes.

✔ A better approach: A network that prioritizes high-quality, cost-efficient providers offers better value for your healthcare dollar. Employees get the care they need from providers they can count on.

Myth #3: Employers have no control over healthcare costs

Reality: Many plans offer little visibility into claims data and make it difficult for employers to track what’s driving their costs. This lack of transparency results in annual increases without real insight into whether or not they’re justified.

✔ A better approach: Employers should demand full data access and transparency, allowing them to proactively manage claims, steer employees to high-value care, and take control of spending. The key to lowering costs isn’t less care, it’s the right care.

Evaluating health plans like an investment

Employers who move away from the year-to-year renewal cycle and toward a long-term investment mindset unlock real savings, better care for employees and financial sustainability.

Invest in a health plan that offers:

✔ A model that rewards savings and reinvests in better care
✔ A provider network built for value, not just size
✔ Cost transparency and data access that put employers in control

At Centivo, we help employers stop renewing and start investing – with smarter plan design, cost predictability and better access to quality care.

Listen to Centivo’s Sean McGowan explain the importance of evaluating health plans like an investment in this video.

Let’s talk about how you can take control of your healthcare spend. Get in touch here.