Earlier this week the National Business Group on Health Care published its yearly review of employer-based health insurance and its predictions for the coming year. The survey is the industry’s first look at costs and plan design changes for 2013.
The bottom line is that the businesses surveyed expect to see health care costs continue to rise over the next year, by about 7% in 2013. That’s the same increase they projected for this year, but smaller than employers experienced the previous three years.
But if you dig a bit deeper into the numbers, and you see there’s actually a slight slowdown in health insurance premium growth – but one that may not necessarily trickle down to the consumer.
Employers do indeed expect the cost of health insurance to rise – but they see it going up at a rate slightly slower than it has in years past. That trend started before the Affordable Care Act passed, and looks to be persisting as it comes into effect:
Some of this has to do with a lower cost of health care. For example, during the recession, people have used fewer health care services, which has translated into lower cost growth.
“Rising health care costs continue to plague employers at an alarming rate,” said Helen Darling, president and CEO of the National Business Group on Health.
But it also has to do with how employers are designing their health insurance plans. Many, as you’ll see in this chart below, see increased cost-sharing as a way to reduce premiums. They might lower the monthly payments that subscribers make – while also increasing the co-pay for each doctor visit.
60% of employers surveyed said they plan to shift more healthcare costs to employees — boo! — but most said their workers’ costs would rise by less than 5 percent next year — yay! Companies are also trying to cut costs by turning to programs that reward workers for healthy behavior.
Employers are beginning to offer premium rates to those employees willing to get preventive care or participate in a something like a smoking cessation program. The average incentive is set to spike by roughly 50% next year, according to the employer survey.
The last graph here looks at how large employers are thinking about the health insurance market in 2014 – after the individual mandate and the health insurance subsides come into effect.
The NBGH did not survey employers on whether they would drop coverage altogether. Instead, they did something more nuanced and asked employers whether they would consider shifting specific populations into the exchanges. They found many employers said yes, they would indeed consider dropping certain populations they currently cover:
Remember that the healthcare law only requires employers with 50 or more workers to provide coverage. The law does not address other individuals who might receive coverage through a company, like early retirees (about 28 percent of companies offer coverage to retirees not yet eligible for Medicare) or a worker’s spouse or dependents.
16% of the companies surveyed said they anticipate some full-time workers could be covered by the exchanges. Many more, however, saw other groups shifting into publicly-subsidized insurance, rather than the benefit package typically provided by employer companies.