San Diego Union-Tribune (CA) November
13, 2019
Employees should
see moderate premium increases in 2020, and they should expect increased
pressure to choose lower-cost options, especially where chronic diseases such
as diabetes are concerned. This is according to a handful of health insurance
forecasts published this summer by the nation's leading medical
prognosticators.
In June,
PricewaterhouseCoopers got the guessing game started, publishing its closely-watched
cost trend report for 2020, which predicts a 5 percent premium increase. The
Society for Human Resource Management followed in August with an identical
number. In mid-September, benefits consultant Aon estimated a 6.5 percent bump.
A few days later Mercer, another global arbiter of corporate benefits, came in
at 3.9 percent.
So it looks like
another year of steady cost increases. And while they're not the double-digit
shockers seen a decade ago, they continue to outpace inflation. More striking
is the increase over multiple years. According to an annual employer health
benefits survey published in September by Kaiser Family Foundation, premiums
have increased 22 percent since 2014 and 35 percent since 2009.
While employers
still pay the vast majority of each employee's health insurance premium,
Kaiser's data shows the amount that employees contribute keeps going up. In
2009, employees, on average, paid 26 percent of the total monthly premium for
coverage compared to about 29 percent in 2019.
To prevent even
larger premium increases, many companies began offering employees health plans
with larger deductibles, co-pays and other cost-sharing features. The goal was
to prevent frivolous use of health services.
But those high
deductibles are now starting to chafe.
"A third of
consumers can't afford their deductible, and that is something that is on the
minds of employers," said Ben Isgur, health research institute leader at
PricewaterhouseCoopers.
Given how much
companies now spend on health insurance for their employees, companies are
beginning to look more closely at the prices providers are charging now that
they're seeing diminishing returns on efforts to get employees to use fewer
services.
The largest
employers surveyed for PwC's latest forecast, Isgur said, are becoming ever
more serious about obtaining lower prices, even if that means opening on-site
health care clinics or contracting with certain "centers of
excellence" for certain high-cost services such as heart surgery.
"Going back to
2014, which wasn't really that long ago, 27 percent of employers had on-site or
near-site primary care clinics, and now that's up to 38 percent," Isgur
said.
Companies are also
getting creative with "carve outs" a term that refers to services
that are covered immediately without employees having to pay their deductibles
first. Certain services, companies are beginning to realize, can end up paying
off in the long run if they prevent more expensive services down the road.
Gary Claxton,
director of the Program on the Health Care Marketplace at Kaiser Family
Foundation, said psychiatric services and treatment of chronic illnesses such
as diabetes are good examples of carve outs that companies are considering more
often.
"You're
starting to see benefit managers asking questions like: 'Does it make sense
that our employees are paying out of pocket for something like insulin until
they reach their deductible, if that deductible is thousands and thousands of
dollars?'" Claxton said.
The experts said
it's important to understand whether or not your company has carved out any
part of its health insurance offering in 2020. Picking a plan in light of such
benefits can end up saving significant cash, especially for those dealing with
a chronic illness.
Employers are also
more likely than ever to craft "narrow" provider networks under the
philosophy that sending larger numbers of employees to a smaller range of
generalists and specialists can reduce the cost of care.
Even in cases where
employers stick with the same set of carriers and plans similar to those that
employees are currently enrolled in, it's important to determine whether your
current doctor is included in next year's offering. It's the same story for
pharmacies, hospitals and urgent care centers. All of these factors, experts
say, should be considered when it comes time to pick a plan.
And it's vitally
important to look beyond what your monthly payment will be. By law, plans are
required to share with employees what a policy's "out-of-pocket
maximum" will be. Above and beyond the monthly premium, that's the highest
amount of cash an employee could expect to pay during the coverage year.
"If you're
choosing a high-deductible plan, you have to ask yourself, 'Do I have enough
money available to pay the whole deductible if something happens all at
once?'" Isgur said.
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