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Employers expect medical plan costs to increase next year by 7.5% in what may be partially a rebound effect of the pandemic.
According to a survey of U.S. employers by International Foundation of Employee Benefit Plans, there was a notable decrease in employees pursuing elective procedures, preventive care, primary care appointments and emergency room visits in 2021 due to the pandemic. Employers surveyed pointed to catastrophic claims, chronic health conditions and delayed preventive/elective care during the pandemic as the top factors contributing to increased plan costs.
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"As we look back at data over the last 18 months, the trend suggests that delaying routine care has resulted in poorer health and well-being, in turn leading to increased claims for both chronic and catastrophic conditions," says Julie Stich, CEBS, vice president of content at the International Foundation.
Only 11% of employers said medical provider costs are pushing plan costs higher, and 7% pointed to specialty or costly prescription drugs.
Employers are considering many options
Employers are considering several options for managing plan costs going into 2023. Telemedicine has become one of the most popular benefits employers are offering or considering offering to manage costs. About one-quarter of employers surveyed said they are considering providing tools such as telemedicine, price transparency tools and health care navigators to keep costs down, while about 22% are looking at cost-sharing initiatives such as deductibles, coinsurance, copays and premium contributions.
Control initiatives, like prior authorization and nurse advice lines, are on the table for 12% of employers while another 12% are re-considering plan design including dependent eligibility, wellness initiatives and high-deductible health plans.
"It is interesting to note that employers are open to a wide range of options to best manage increased costs," says Stich. "The tight labor market has made many employers hesitant to increase employees' portion of the benefit cost coverage. A combination of value solutions may be an ideal cost management technique for many organizations."
Kristen Beckman is a freelance writer based in Colorado. She previously was a writer and editor for ALM's Retirement Advisor magazine and LifeHealthPro online channel.
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