With health care costs expected to rise over the next three years, managing health plan costs is a top priority for many U.S. employers. research released on Thursday found.
The Willis Towers Watson (WTW) report received responses from 455 US employers in August. These employers, both self-insured and fully insured, have a total of 8.2 million employees.
Employers expect health care spending to increase 6% next year, compared to the 5% increase they have this year. Those surveyed also see no improvement in the future, with 71% saying they expect a moderate to significant increase over the next three years.
Another 54% of respondents said they expect their health care costs to exceed their budgets for 2022. To combat this, 41% of employers say they have made changes to their three-year budget plans, and 47% say they discuss changes. These adjustments include implementing programs and/or selecting suppliers that will reduce costs; increasing emphasis on account-based or consumer-directed health plans; and shifting costs to employees through premium contributions. Ann account-based health plan combines a high-deductible health plan with a health savings account.
“With no end in sight to projected cost increases, the need to manage health care costs and address employee affordability has never been greater,” said Courtney Stubblefield, head of health and benefits insights and solutions at WTW. in a media release. “Yet, with so much potential action, employers must focus on changes that go beyond meeting the needs of their employees to also support efforts to attract and retain talent during a tight labor market.”
To control costs, employers listed several actions they are currently taking or plan to take. They include:
- Using programs that combat fraud, waste and abuse. A quarter of those surveyed said they were doing so, and another 22% said they expected to do so by 2024.
- Applying higher out-of-pocket costs to less effective services. Almost a quarter, or 23%, said they were doing so, and 19% said they planned or were considering doing so by 2024.
- Offering Concierge Plan Navigation, which is a service that helps companies and employees navigate the health care system, including the health plan enrollment process. More than 20% are already doing so, and another 25% plan or are considering doing so in 2024.
Taking some of these steps now can mitigate the need to make more dramatic changes in the future, said Tim Stawicki, cchief health and benefits actuary at WTW.
“Employers who act now to anticipate, plan and implement solutions and strategies that balance employee affordability goals with escalating costs can avoid having to take desperate measures in an environment of rising health care costs,” Stawicki said in a statement . “Undoubtedly, employers face difficult challenges over the next few years. And with limited budgets, the challenge of making decisions that take health care affordability and engagement into account is exponentially greater.
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