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Cost are rising for Employer sponsored health Insurance..again!

June 18, 2018Lolly LegerHealthcare

By: Lolly Leger
Group Health, Inc

Rising medical costs are alive and well in the employer sponsored insurance
market.

According to the Medical Cost Trend report employers and insurers are
expecting a 6 percent increase in healthcare costs in 2019.

In most cases part of those costs are passed on to employees.

Health care cost increases are not sustainable.

The economy, wages and the Consumer Price Index are not growing at the same
rate as health care costs.

Health care accounts for 12 percent of wages. This is double what it was 30
years ago.

There are three dominant trends that are fueling rising costs.

Health care everywhere.

Employers are offering workers access to health care in new places, like retail clinics, urgent care clinics and electronic physician consultations.
This is increasing what insurers call “utilization” in consumption of services, which drives up claims and costs.

Consolidation among hospitals and other health care providers has been rampant of late.
Mergers may eventually help lower costs but for the time being consolidation is actually increasing costs.

After a merger, it is usually the company with the higher cost providers that dominates.
Contracts with insurers are renegotiated at the higher rates and in turn raising costs.

With the current health care consolidation, many physicians have moved out of private practice and now work for hospital companies.
42 percent of physicians were employed by hospitals in 2016, up from 25 percent in 2012.
Hospitals and medical groups tend to charge anywhere from 14 percent to 30 percent more than physicians in private practice.
About 72 percent of employers offered health services to their employees this year.
Employers are also embracing high performance networks. These are often called narrow networks, groups of selective doctors that an insurer chooses to provide care for the bulk of covered employees.
These providers aren’t necessarily the lowest cost providers but they are proven to have the best results. That is why the employer wants employees seen there.
If you’re an employee at a large company, expect to see more offerings for care advocates and specialized networks.
Employers will want to take advantage of these cost saving tools.
We will most likely see more opportunities to grab health care at non traditional places, like drug stores or clinics.
You may like the convenience and your employer will like the idea that a small health problem caught now can avoid an expensive health episode later.

Lolly J. Leger
CEO
Group Health, Inc.

Direct Phone 225-284-5378

Lolly Leger