Health benefit costs will grow by nearly four percent in 2020, according to early results from the latest Mercer National Survey of Employer-Sponsored Health Plans. Based on responses from 1,511 U.S. employers, Mercer projected that the average total health benefits cost per employee would rise by 3.9 percent in 2020.
"While this continues the trend of low single-digit increases that began in 2012, health benefit costs are still rising faster than overall inflation. And with the economy slowing, employers know they can't afford to be complacent," said Tracy Watts, Mercer's national leader for U.S. health policy.
Mercer said that it appeared that cost-shifting to employees will be less of a factor than in recent years, with just 43 percent of responding employers raising deductibles or otherwise cutting benefits to hold down cost in 2020. Since 2014, the underlying medical trend – the amount costs would rise if employers renewed plans without making changes – has cooled from eight percent to five percent, easing some of the pressure to make short-term cost cuts. During this time, employers have been adopting tactics that seek to reduce cost via improved health outcomes, such as targeted support for specific health conditions and steering plan members to higher quality providers, Mercer added.
"Rather than shift cost to employees, these approaches typically enhance the health care experience," commented Ms. Watts.
According to Mercer, in support of higher quality care, employers continued to add tech-enabled programs designed to help members with specific health issues such as diabetes, insomnia, and infertility. In 2019, 62 percent of respondents with 500 or more employees offered one or more of such targeted solutions, compared to 55 percent in 2018.
Improving access to health benefits information and resources is another growing trend, Mercer observed. In 2019, 40 percent of respondents with 500 or more employees said that all or most of their benefit offerings were accessible to employees on a single, fully integrated digital platform – most often through a smartphone app – compared with 34 percent in Mercer's 2018 survey.
Survey results also showed employers taking action to help ensure plan members received high quality care. For example, 39 percent of employers with 500 or more employees now provide access to a Center of Excellence ("COE") for cardiology, bariatric surgery, cancer, and other complex treatments. Further, 16 percent said that they steer employees to a COE with lower cost-sharing or even by requiring its use.
"Employers have been experimenting with new approaches to tackle high costs, inconsistent quality, and low patient satisfaction," said Ms. Watts. "While there's still so much more to do, it's encouraging to see signs that health innovation may be starting to slow health cost growth – without shifting cost back to employees."
Learn more: www.mercer.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].