Health insurance experts are forecasting double-digit health care cost increases in the new year. They identify growing premiums and potentially shrinking employer-sponsored coverage as leading forces. A recent Mercer survey of large employers paints a deeply alarming picture. Nearly half say they’ll increase their employees’ out-of-pocket costs, an alarming indication of the death knell this decision sounds for the reality of affordable healthcare.
Mercer’s survey is the latest signal of a warming trend among big employers. Around half reported that they are planning strategies to move even more financial responsibilities onto their employee base. This is a potentially monumental decision, especially as employees consistently deal with increasing costs in a hyper-inflated economy.
Vinnie Daboul, the Boston-based managing director of RT Consulting, painted a complicated picture when it comes to pharmaceutical costs.
“Pharmacy just gives me a headache, no pun intended.” – Vinnie Daboul
This angst over pharmacy expenses goes well beyond sore temples. Perhaps most important, Larry Levitt, executive vice president at KFF wants to focus you on the uncertainty that’s now washing over every market for health insurance.
“We’re in a period of uncertainty in every health insurance market right now, which is something we haven’t seen in a very long time.” – Larry Levitt
In its recent analysis, KFF estimates insurers are on track to increase premiums by about 20% as soon as 2026. The soaring price of new gene therapies is exacerbating this uptick. Some of these new treatments can cost more than $2 million for just one dose. It shouldn’t be surprising that such staggering costs only compound the burden on employers and employees to put it bluntly.
Business owner Shirley Modlin recently shared her concerns about the coming cost increases in the marketplace. Those improved, more accessible tax credits will expire after Dec. 31 this year. This crisis puts access to affordable healthcare at risk for tens of millions of people. If these credits actually do expire, KFF conservatively estimates that coverage costs for consumers could increase by 75% or more.
Meanwhile, Emily Bremer, president of The Bremer Group, highlights another troubling trend: some health plans may begin implementing separate deductibles for pharmaceutical and medical benefits. That could force the patients to pay more out of pocket for their medicines.
“If something doesn’t give with pharmacy costs, it’s going to be coming sooner than we’d like to think.” – Emily Bremer
They’ve been increasing at an even faster rate on the larger, overall market for employer-sponsored coverage. Employers are still trying to understand the long-term financial effects of these increased costs. To keep costs from skyrocketing, most of them will need to increase employee contributions or modify plan designs.
Jen Collier } is an industry luminary. She’s really concerned that these big changes are pushing medical costs higher in a way that we haven’t had happen before.
“It’s adding to medical (cost growth) in a way that we haven’t seen in the past.” – Jen Collier
Rising premiums along with the possibility of dramatic changes to healthcare plans make things uncertain. At the same time, the tax credit–mediated expiration of this financial support hangs over employees and employers alike. As stakeholders navigate this uncertain landscape, many are left wondering how best to balance rising costs with the need for accessible healthcare.
