Increase in employer and employee health care costs expected in 2016, 2017
Employers are anticipating a 5 percent increase in total health care costs for both employers and employees, which, according to the 21st annual Best Practices in Health Care Employer Survey by Willis Towers Watson, will be a 1 percent increase from 2015.
To attach a dollar amount to the findings, employers predict annual employees' cost will rise to $12,338 in 2016 and just under $13,000 in 2017.
Eighty-one percent of employers will make slight adjustments to their employee premium contributions to accommodate the financial pressure. They are also expected to make modest changes to other cost-sharing provisions like deductibles and out-of-pocket limits for 2017.
“The bottom line for employees as consumers of health care for the plan year 2017 is that even as employers expect continued health care cost increases this year and next, they are concerned about employees being able to afford their share of benefit costs,” Susan Thomas, managing director for Capital Content, recently told Patient Daily. “So they will focus on making changes aimed at keeping high-cost services in check as opposed to changes that will increase employee costs.”
Thomas said some examples of where employers will make changes are more restrictive pharmacy benefits, surcharges for dependent coverage -- particularly for working spouses who are eligible for coverage from their own employers -- and incentives for employees to select centers of excellence for specialty services.
The survey’s findings showed that almost nine out of 10 employers, or 88 percent, listed managing pharmacy spending specifically for high-cost specialty drugs as their top priority for the next three years by ensuring appropriate utilization, addressing specialty pharmacy spending that occurs through the medical benefit plan, and differentiating benefit coverage to influence site of care.
In addition, the survey showed that dependent costs continue to be an area of concern. Currently, 28 percent of employers have already decreased spousal subsidies by introducing surcharges for insurance coverage when coverage can be obtained through the spouse’s own employer. The percentage of employers adding a working spouse surcharge is expected to nearly double by 2018. The average surcharge is now about $100 per month, in addition to required premium contributions.
“More employers are adding surcharges for coverage of working spouses who are eligible for coverage for their own employers as a way of encouraging spouses to seek insurance from their own employers,” Thomas said. “The average surcharge today is about $100 per month, in addition to required premium coverage.”
Thomas added that, although cost management is always a top priority for employers, they are also looking for ways to modernize benefits to stay relevant and competitive.
“These include offering a broader array of benefit types so employees can personalize their benefits portfolios by choosing benefits that are right for them,” she said. “They will also work to improve the employee benefit experience by increasing choice, improving decision support and creating a shopping experience that rivals top retail sites.”