Rich Daly | September 16, 2015
AMONG THE HALF OF WORKERS WITH RISING HEALTHCARE COSTS, A LARGE SHARE ARE SKIMPING ON MEDICAL CARE.
Sept. 16—The share of workers with employer-provided insurance who had increases in healthcare costs declined to the lowest level in 10 years, according to a new employee survey.
Fifty percent of workers had an increase in healthcare costs during the past year, down from 59 percent in 2014 and marking the lowest percentage in the 10 years that the question has been asked by the Employer Benefit Research Institute (EBRI)/Greenwald & Associates Health and Voluntary Workplace Benefits Survey. Meanwhile, the share reporting no change in healthcare costs increased to 47 percent in 2015 from 36 percent in 2014.
“We thought that was a pretty significant finding because it was a pretty big drop,” Paul Fronstin, a senior research associate at EBRI, said in an interview. “Usually a lot of things we find are not that big of a difference on a year-to-year basis.”
Although the survey did not delve into the underlying reasons for the moderation in employee healthcare costs, other data sources recently have identified a slowdown in healthcare cost growth.
For instance, preliminary data from an annual employer survey released Sept. 16 by consultant Mercer found employers expected their 2016 health benefit costs per employee would increase 6.4 percent if they made no changes, which was down from a 7.1 percent increase in 2015.
“We do know that when healthcare costs aren’t going up, employers are not shifting them to workers,” Fronstin said. “So, we may be in this lull where workers have benefitted from that.”
The findings also could reflect the growing share of workers who are being enrolled in high-deductible health plans (HDHPs). Employers’ 2016 cost increases were expected to drop further to 4.2 percent after they implemented changes such as raising employee deductibles, according to Mercer.
“Will I see my deductible go up? Well, that’s already happened, and it may not go up again for another couple of years. That may be playing into this as well,” Fronstin said about the lower share of workers with cost increases this year.
Twenty percent of covered workers are enrolled in a high-deductible plan with a savings option, according to 2014 data from the Kaiser Family Foundation.
“We hear about it, but not that many workers are being shifted [to HDHPs] on a year-to-year basis,” Fronstin said.
That may change next year, according to the Mercer survey. A quarter of employer respondents said they were considering adding an HDHP with a savings account or taking steps to increase enrollment in such plans specifically in an effort to avoid the Affordable Care Act’s Cadillac tax, which goes into effect in 2018. Mercer estimated that, based on plan costs reported in 2014, about a third of all employers (31 percent) were on track to reach the excise tax threshold.
Other steps employers are considering to avoid the new tax include elimination of healthcare flexible spending accounts (21 percent) and moving into a private insurance marketplace (23 percent).
Wellness Interest
Another looming trend identified in the Mercer survey was a big increase in employer interest in employee wellness programs. Forty-two percent of respondents were considering adding or expanding programs to improve employee health and well-being—specifically as a way to avoid the excise tax by cutting down on medical plan spending.
Although previous employer wellness programs have engendered pushback from some health policy experts and workers’ rights advocates, employees may be willing to consider such initiatives. For instance, 69 percent of respondents with rising costs in the EBRI survey said those rising expenses are leading them to try to take better care of themselves.
“There’s no doubt that more and more employers are introducing financial incentives to get workers to do health risk assessments, to get them to do biometric screenings, and people are starting to know their numbers,” Fronstin said. “And that’s the first step to people deciding to take better care of themselves.”
Provider Impact
Among potentially problematic reactions to the continuing increase in healthcare costs for many workers was the increasing willingness to scrimp on care. Specifically, nearly half of workers with rising costs said they see a physician only for “more serious conditions or symptoms,” and 43 percent delay going to the doctor due to costs. Both reactions decreased from last year’s survey, when 55 percent said they limit physician visits to more serious conditions or symptoms and 49 percent reported delaying physician care over cost concerns.
“We always have found that a sizable number of workers are more engaged with their health as a result of their costs going up, and there is good and bad in that,” Fronstin said.
The EBRI survey also showed fewer workers were relying on generics for costs savings. In 2015, 52 percent said they choose generic drugs more often, compared with 61 percent in 2014.
Source: HFMA