The numbers are in, and they don’t look good. Healthcare costs for 2023 are expected to increase anywhere from 5.8% to 7.5%. That’s up from 3.7 % in 2022. Sure, inflation is to blame. But that’s not all.
Healthcare utilization is rebounding as those who missed care during the pandemic are heading back to the doctor. Add long COVID to the problem. And don’t forget the rising costs of specialty and blockbuster drugs.
It’s no surprise that employers are worried. In a recent survey 94% of executives said that managing healthcare costs will be their top priority in the next two years. They also reported that cost shifting to employees is not an option, given the difficulty of attracting and retaining talent.
So how can employers manage growing costs while offering quality, affordable benefits? Consider these four strategies:
1. Adjust health plan design—Most insurers believe that managing a plan’s network of providers is crucial for controlling rising medical costs. Directly contracting with high-quality and cost-effective care providers for in-network coverage is one option. Here are four other idea
- Leveraging advanced primary care (APC)—This allows providers to spend more time with patients, deliver comprehensive care and focus on outcomes. Also included are features to reduce overall medical expenses. Think: employee wellness programs, on-site or near-site clinics, telemedicine and centers of excellence.
- Programs for low-wage workers—If you know where to look, you can find affordable, quality benefits for employees at certain income thresholds. For example, TAC offers a solution with no deductibles or copays, a health advocate, virtual primary care doctors, low-price prescription drugs and free or discounted hospital coverage.
- Self-funding—A well-designed, self-funded plan can eliminate risk, offers flexibility to customize benefits and can lower costs. Most important, self-funding provides access to claims data. That information is key to revealing medical waste, fraud and abuse and identifying cost-saving opportunities.
2. Expand voluntary benefits—More and more employers are offering voluntary benefits, such as supplemental health insurance for catastrophic events. They are also streamlining benefits in an interdisciplinary manner. For example, this could include combining vision, pharmacy, dental and disability benefits to create savings.
3. Improve employee health care literacy—If you are like most employers, you offer education during open enrollment period. That’s great, but a one-and-done approach won’t be effective in guiding employees to cost-effective care year-round. Keeping information in front of your team members shows that you care about their health and their financial wellbeing.
4. Rely more on brokers’ expertise—Insurance brokers with deep industry expertise can help address rising health care costs. They can recommend funding strategies that can reduce risk, lower costs and provide enhanced benefits. Brokers can also help educate employees on how best to shop for care options and they can play the role of advocate: fighting health care claims on behalf of employees.
Is your broker offering creative alternatives to help you manage your healthcare benefit spend? If not, maybe it’s time to connect with TAC Benefits Group. Speak with one of our experts. Contact TAC Benefits Group at email@example.com.