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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