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Self-insured employers are facing some tough challenges as we look ahead to 2019:
The obvious temptation is to roll costs onto employees, and that is what many organizations are forced to do. Every year, industry publications explain how benefits leaders are under pressure to control costs, and the obvious relief valve is reducing benefits coverage in one way or another. Whether it’s high deductible health plans (HDHPs), higher premiums, or cutting programs, many employers feel like they have no choice.
While we do see this concern around costs among our clients, Artemis also talks to a lot of employers, consultants, and brokers who are instead finding ways to reduce costs without affecting employees. So how are they doing it?
Here are a few strategies employers are using to avoid pushing the high cost of healthcare onto their employers.
In the U.S. healthcare system, approximately ⅓ of all spending is wasted. It’s nearly impossible to stop the waste entirely, but there are a lot of strategies that help employers get back the dollars they’re leaving on the table.
There are a number of ways to do this:
Yes, HDHPs are controversial due to the potential for higher out-of-pocket costs for members. But these plans are gaining popularity with consumers because they can be economical and they come with Health Savings Accounts. Current federal limits allow a $6,900 contribution to a family account each year, which certainly helps cover out-of-pocket costs.
From this CNN piece:
“More and more employers are also linking high-deductible plans to savings or reimbursement accounts to help workers handle the cost of care. These types of plans have soared to 29% in 2016, up from 20% two years earlier. Companies contribute to these plans and that money can be used to cover bills before the employee hits the deductible.”
While HDHPs might seem like a way of shifting costs to employees, these plans can encourage patients to seek value-based care, avoid unnecessary treatments, and stay in-network. Additionally, many employers are taking on a portion of HSA contributions, funding members’ accounts and saving on the premiums they’d otherwise pay on traditional plans. Employer HSA contributions are the perfect way to offset the downsides of an HDHP for members.
We’ll be keeping a close eye on one other trend in HSAs: using them as supplementary retirement accounts.
We’ve written about how to save on pharmacy expenses in the past. There’s no doubt this is a hot topic for employers, consultants, and brokers. More than any other benefit program, pharmacy has the potential to be unmanageable for both members and employers.
But the good news is this: savings for employers also mean savings for members. A good example is the common Type II diabetes drug metformin. It’s sold under a number of brand names, and it can cost as much as $1,500 per claim for employers. But a generic version is available for just 10 cents per claim. With formulary management, an employer can steer members taking this drug to the generic version. This is savings that employers can pass along to members, and they’ll feel the difference when they pick up their prescriptions at the pharmacy.
These are just a few examples of how self-insured employers are using data to keep benefits costs low, not just for their own budgets, but for their members too.