Employer, employee healthcare costs to rise in 2014
Research on the relationship between health care costs, expenditures and patient behavior has been muddy all summer, but two employer-focused reports issued this week are clear on one thing: the insured will be paying more for coverage in 2014. Both the employee benefits organization United Benefit Advisors and the nonprofit National Business Group on Health issued reports that employers expect to lay out 7% more to cover employees, following a 7% increase in coverage costs this year. At the same time, employers will continue to put a greater financial burden on employees.United Benefit Advisors reports that employers shared the higher costs by also increasing employee costs through plan designs that had higher in-network deductibles, higher in-network co-insurance and higher out-of-pocket maximums. UBA says singles came out a bit better, with employers covering 18% of a single person's insurance premium, while asking employees with dependents to pay 3% more of their premium—but the increased employer costs were not accompanied by patient savings. UBA's data shows that the out-of-pocket maximum, after patients hit deductibles, rose between $152 and $3,641 for singles, and between $433 and $8,043 for families. In-network deductibles increased bewteen $91 and $1,852 for singles and between $216 and $4,225 for families.
A move towards this greater out-of-pocket expense is expected to continue. While healthcare reform critics may point to the delay in creating a single deductible to cover healthcare and prescription costs, the explanation is much bigger. The National Benefits Group's data found that employers are increasingly attracted to consumer-directed health plans. The NBG said around 72% of employers offer at least one of these plans, and 22% intend to offer only CDHPs in 2014, up from 19% in 2013.
Controlling costs has been a great concern for employers as well as for the employed. A survey by analytics firm Crossix found that although fewer drugs offered discount cards in the second quarter of this year, consumers snapped them up and redeemed 20% more of these cards than in the same period in 2012. While use increased for chronic conditions like blood pressure and diabetes, redemption dropped for high-maintenance conditions like COPD, ADHD and depression.
The increased use, not the drop-off, is of note, because the tension between higher insurance costs and patient care has shown that although aggregate healthcare costs appear to have dropped, it is at the expense of lower-level care.