Open-enrollment and budgeting season are upon many organizations and the trends are similar to previous years: rising costs, shifts in plan design, increased emphasis on wellness and health management, and greater employee accountability – but with a few positive surprises. Here are some major health care trends that had effects on organizations in 2012.
Health care costs are still rising, but are slowing.
Several studies conducted by Mercer, Towers Watson, and Segal, have found that health care costs will continue to rise in 2012 by approximately 5.4-7.6%, but there is solid evidence that costs are slowing from the past few years.
Cost-shifting to employees is slowing from past years.
As a result of lower increases in health care costs, experts believe that cost shifting to employees will slow as well in 2012. This trend coupled with slower health care cost increases is likely attributable to more cost sharing practices that have occurred over the past few years and wellness initiatives that many employers are using to manage health care expenses.
Healthcare utilization seems to be trending downhill.
Other positive news is that healthcare utilization is trending downhill. Employees are using fewer medical services, mainly due to wellness and health management programs and choices to postpone medical visits and procedures due to higher health insurance costs (co-pays, deductibles, etc.) and lower disposable income.
High deductible and health savings plan options continue to increase in popularity.
Employers are placing more accountability on individuals in terms of spending their health care dollars and managing their health by integrating a Health Savings Account (HSA) option in their benefits packages. Similarly, high deductible plans are quickly becoming a chosen plan design for many employers.
Greater individual accountability for health continues to increase.
In addition to modifying plan design, employers continue to offer tools to help employees take responsibility for their health including health risk assessments and screening. Many have also turned to incentives to promote the healthy behaviors they are seeking.
Employers are re-evaluating their benefits strategies.
Organizations continue to be concerned about the sustainability of health insurance costs on their businesses and are re-evaluating their benefits strategies for the short and long term, focusing on benefits that are most valuable to their employees including health care, retirement, and lifestyle benefits.
More employers are exploring narrower options and access.
More small and midsize employers are considering swapping lower premiums for narrower access to providers and changing their approach to providing benefits for dependents. Out-of-network options are also coming at a higher price. These three areas appear to be the most common tradeoffs employers are making in order to keep premium costs manageable.
Health management will remain a critical priority for employers.
Organizations aren’t planning to decrease their wellness efforts anytime soon. In fact, in 2012 and beyond, employers can expect that health management and wellness programs will increase and continue to be a priority as they attempt to control health care costs. Employers will be focusing on greater prevention of health conditions by exploring ways to integrate wellness initiatives into their benefits strategy.
As your organization plans its health care strategies for 2012 and negotiates its renewal rates, keep these trends in mind to ensure that your organization manages its health insurance costs effectively in the short and long term.
Sources: Mercer, PricewaterhouseCoopers, Segal, Towers Watson, WorldatWork