Professional-services firm Aon has released its 2019 projections for healthcare premiums and, just as it predicted in 2018, the costs are estimated to increase by 3.5 percent.
In 2018, employees didn’t see the full 3.5 percent hike, rather they were hit with a 2.2 percent increase. If these increases continue, they’ll quickly outpace cost-of-living/merit increases (2.2 percent is already higher than the current inflation rate), which means employers may want to reconsider how they handle healthcare coverage.
In the past, employers turned to high-deductible healthcare plans (with health-savings options) to keep premium increases low for employees. According to The Kaiser Family Foundation’s 2018 Employer Health Benefits Survey, since 2013 the average deductible for single coverage among all workers increased 53 percent, which has, in part, been sparked by a 50 percent increase in HDHP enrollments during that same time frame.
In our current, competitive labor market, however, employers may find it difficult to continue imposing these higher cost-sharing healthcare options.
“If underlying healthcare prices and service use begin to grow as part of stronger economic growth, employer and health plans may need to look for tools other than higher cost sharing to address the pressures that would lead to higher premium growth,” wrote the survey authors.
Some tools companies are using include healthcare navigators that assist employees with finding local high-quality, cost-effective care or telehealth options (when applicable). Aon’s research found that other organizations are implementing condition-specific high-performance networks, managing prescription drug costs through purchasing coalitions or creating value-based insurance designs.
“Leading employers are increasingly concerned about the affordability of medical costs and the overall wellbeing of their employees,” said Stephen Caulk, senior vice president and chair of Aon’s Trend Committee. “Couple that with low unemployment numbers, companies are turning to a variety of strategies to attract and retain talent, including rethinking how they manage healthcare cost increases. It’s no surprise that employers are turning away from shifting costs to employees to addressing the underlying drivers of cost increases.”