Open enrollment season is under way, and when workers get their health-plan information, many of them can expect higher out-of-pocket costs.
As employers cope with rising health costs, some are shifting more of the burden onto their workers, often in the form of health insurance plans that carry high deductibles. To help rein in expenses, businesses also will ask their employees to take part in cost-cutting drug programs and use new services that provide Skype-like video consultations with doctors, according to several studies tracking employer health care.
Health-care costs at large U.S. businesses are expected to rise 6% in 2017, according to an annual survey of 133 major companies offering coverage to more than 15 million Americans by the National Business Group on Health, or NBGH, a nonprofit association that focuses on employer-provided health care.
Deductibles will be a pain point for many employees. For the first time, more than half of workers—51%— have a deductible of more than $1,000 for a plan covering a single person, compared with 46% last year, according the Kaiser/HRET survey.
“Long gone are the days when you thought your insurance—even if you were paying higher premiums—was going to cover you very well,” says Bettina Deynes, vice president of human resources for the Society for Human Resource Management, or SHRM, which employs 400 people. “Even if you select the best plans your company offered, you are still not safe from encountering some major expenses.”
In 2016, 83% of covered workers face a deductible for a plan covering a single person. Workers on a single coverage plan have an average deductible of $1,478, up 49% since 2011, according to a recent annual poll of 1,933 employers conducted by the nonprofit Kaiser Family Foundation and the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.
However, some workers’ deductibles will be offset by employers’ contributions to special tax-free funds called health-savings accounts that workers can use to pay for out-of-pocket health care costs.
This year, 29% of covered workers were enrolled in high-deductible plans that can be paired with health-savings accounts, up from 24% last year and 20% in 2014, the Kaiser/HRET research found. Such plans are attractive to younger, healthier people, but they can carry significant out of pocket costs when workers get sick.
About 84% of large employers will offer high-deductible health plans in 2017, and 35% of large employers will offer only high-deductible plans to their workforce, a slight increase from a year earlier, according to the NBGH survey.
Spending on pharmaceuticals is driving much of the cost increase. Prescription drug costs are expected to rise 7.3% in 2017, while specialty drugs, which often are used to treat chronic conditions such as cancer, multiple sclerosis and rheumatoid arthritis, are projected to surge 16.8%, according to the Express Scripts Drug Trend report.
Workers are likely to notice their employers institute cost-cutting measures to curb prescription drug costs. These include asking employees to pay the difference between generic and brand prices and to try less-expensive drugs before pricier ones, according to the NBGH research.
The rising costs won’t come without some innovation. A growing number of employers say they would encourage workers to use telemedicine services, in which medical professionals dispense care and advice over video or phone.
About 90% of large employers plan to make telehealth available to employees next year, a sharp increase from 70% this year, the NBGH research found, although the rules governing telemedicine differ widely by state. Employees, however, may need some prodding to contact doctors on their smartphones and computers. Human-resources executives say that they are seeing low, but growing, usage of telemedicine
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