Employers look for ways to maintain quality while holding line on costs in 2022
Mercer is forecasting a 4.7% increase in health benefit costs, while Willis Towers Watson predicts 5%.
Employers are planning strategies to keep health care expenses in check in 2022, when prices are expected to rise by around 5%.
“Rising costs and increased utilization fueled by a resurgence in deferred care are driving employers to find new ways to control costs while providing employees with affordable, high-quality care,” said Julie Stone, managing director, health and benefits, for Willis Towers Watson. “Employers must now address the Delta variant, encouraging workers to access the care and support they need while grappling with rapidly evolving conditions.”
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Willis Towers Watson and Mercer each surveyed employers about how they plan to address rising costs. This is what they found.
Telehealth. A large majority of employees who tried telemedicine for the first time during the pandemic said they intend to keep using it.
Pay- and grade-based contributions. Nearly a quarter of employers currently structure employee contributions based on pay levels or job grades. Another 8% are planning or considering doing so in the next two years.
Working spouse surcharges. A quarter of employers use spousal surcharges when additional employer coverage is available for the working spouse. Another 9% are planning or considering spousal charges in the next two years.
Narrow networks. Nearly one-third of employers are planning or considering offering a narrow network of higher-quality and/or lower-cost providers. Currently, two in 10 offer narrow networks.
Centers of excellence. Nearly half of employers use centers of excellence within their health plans, and 23% are planning or considering adding them.
Concierge services. About one-third offer access to concierge services with integrated care management programs, and 25% are planning or considering doing so.
Telebehavioral health. Most employers (89%) are offering coverage for telebehavioral health services, and 7% are planning or considering doing so.
Onsite health promotions. More than half of employers offer onsite health promotion activities, and 17% are planning or considering it.
Medication adherence. Only 13% have plans in place that support medication adherence and improved health outcomes in more vulnerable populations. However, nearly 30% are planning or considering changes.
Specialty drugs. Fifty-four percent evaluate specialty drug costs and utilization performance through the medical benefit, and another 29% are planning or considering doing so.
Cost-sharing. On average, employees will pick up 22% of total health plan premium costs in 2022, unchanged from 2021.
Wellness programs. About a fifth of survey respondents said they will add or enhance well-being initiatives that are targeted specifically to remote workers.
Despite these strategies, employer-sponsored health plans face many unknowns in developing cost projections for 2022, according to Sunit Patel, Mercer’s chief actuary for health and benefits.
“One issue is that people have been deferring or canceling care for the past two years and while that lowers cost in the short term, it can increase cost over the longer term when medical conditions are diagnosed later or left untreated for too long,” Patel said. “On top of that, health care prices are being impacted by labor shortages, wage inflation, supply constraints and the new transparency requirements. So it’s not surprising that we’re seeing wide variations in cost projections for next year.”
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