Survey: 67% of employers to prioritize controlling healthcare costs over next 3 years
Employers expect healthcare costs to increase 6% next year, up from the 5% increase they are experiencing this year. Respondents don’t see this improving down the road either, with 71% saying they anticipate moderate to significant increases over the next three years.
With healthcare costs expected to rise over the next three years, managing health plan costs is a top priority for many U.S. employers, a survey released Thursday found.
The Willis Towers Watson (WTW) report received responses from 455 U.S. employers in August. Those employers, both self-insured and fully-insured, have a total of 8.2 million employees.
Employers expect healthcare costs to increase 6% next year, up from the 5% increase they are experiencing this year. Respondents don’t see this improving down the road either, with 71% saying they anticipate moderate to significant increases over the next three years.
Another 54% of respondents said they expect their healthcare costs to be above their budget for 2022. To combat this, 41% of employers said they have made changes to their three-year budget plans and 47% said they are discussing changes. These adjustments include implementing programs and/or selecting vendors that will bring down costs; increasing emphasis on account-based health plans or consumer-directed health plans; and shifting costs to employees through premium contributions. An 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 healthcare costs and address employee affordability has never been greater,” said Courtney Stubblefield, insights and solutions leader of health and benefits at WTW, in a news release. “Yet, with so many potential actions, employers must focus on changes that go beyond addressing their employees’ needs to also support efforts to attract and retain talent during a tight labor market.”
To control costs, the employers listed several actions they are currently taking or plan to take. These include:
- Using programs that fight fraud, waste and abuse. A quarter of respondents said they are doing this and another 22% said they expect to by 2024.
- Implementing higher out-of-pocket costs for less efficient services. Almost a quarter, or 23%, said they are doing this and 19% said they are planning or considering doing so by 2024.
- Offering plan concierge navigation, which is a service that helps companies and employees navigate the healthcare system, including in the health plan enrollment process. More than 20% are doing this already and another 25% plan or are considering doing so in 2024.
Taking some of these steps now may mitigate the need to make more dramatic changes down the road, said Tim Stawicki, chief actuary of health and benefits at WTW.
“Employers that act now to predict, plan and implement solutions and strategies that balance employee affordability objectives with escalating prices can avoid having to take desperate measures in a rising healthcare cost environment,” Stawicki said in a statement. “Without question, employers face difficult challenges in the next few years. And with limited budgets, the challenge of making decisions that consider healthcare affordability and engagement is exponentially greater.”