What to Expect in 2018 for Comprehensive Health Insurance Premiums

There is great uncertainty surrounding the health insurance market in 2018. For starters, the Republican Party is considering repealing the Affordable Care Act’s individual mandate.

According to the Congressional Budget Office (CBO), the number of uninsured would spike 13 million by 2027 if the mandate is repealed. Premiums would also rise by 10 percent per year over the next decade.

Other government actions are placing upward pressure on comprehensive health insurance premiums. In October, the Trump administration ended cost-sharing subsidies designed to help low-income Americans afford insurance.

This decision spurred insurers to raise premiums across the board for 2018. Clearly, the comprehensive health insurance market is volatile.

Read on to learn more about health insurance premiums in 2018 and how employers are affected.

Group Insurance Premiums Are Also Rising

Much of the focus in Washington D.C. is on the individual marketplace. However, the government’s actions on subsidies and the individual mandate are also negatively affecting group plans.

Typically, premiums for group plans increase by 3 percent per year. In 2018, on the other hand, group plan premiums are projected to rise by 4.3 percent.

This small increase does not tell the entire story. In order to minimize premium increases, insurers are electing to slash benefits. Specifically, insurers are raising deductibles to reduce expenses.

If deductibles were kept at prior year levels, group plan premiums would have doubled to 6 percent. This is just one tactic that employers are taking to slow premium growth.

What Are Employers Doing to Reduce Health Care Costs?

Besides electing for high deductible plans, what other steps are employers taking to reduce cost? One proven way to reduce healthcare costs is steering employees towards preferred providers.

The reason behind this emphasis is because preferred providers produce better health outcomes. This saves money in the long run.

Employers are also using analytics to improve health care. Pharmacy costs are a target as well, with plans to reduce the cost of prescription drugs. This can be achieved by prioritizing generic drugs over top name brands that are inexplicably expensive.

Employee wellness is another buzzword in the group healthcare arena. The concept is that employees can reduce health care costs by promoting self-health. This means eating healthy, exercising routinely, and improving quality of life.

To incentivize employees to focus on wellness, group plans are offering reward programs. For example, an employee earns points towards rewards for exercising for 30 minutes or eating a portion of vegetables.

When the employee reaches specific milestones, they earn a prepaid debit card or a store credit to purchase medical supplies.

Lastly, employers are placing an emphasis on preventative care in order to stop catastrophic events before they happen. Again, the goal is to reduce long-term health care costs.

A good example of early detection initiatives are colon cancer screenings. There are many other examples including blood pressure checks and vaccinations.

Comprehensive Health Insurance — Wrapping It Up

The cost to provide health insurance continues to increase each year. As a result, premiums for both individual and group plans are rising at a faster pace than normal.

At the same time, employers scale back benefits by raising deductibles. Employee wellness initiatives and emphasis on generic drugs are other methods employed to reduce cost.

At Specialty Care Management, we specialize in employer cost containment for the catastrophic costs associated with renal disease, cancer management and transplants. Employers looking to better manage and mitigate plan costs, we can help. Contact us today.