Chris Wrba of Venefits LLC discusses what you can expect from 2018 health insurance plans.
Affordable health plans with low premiums and high deductibles are expected to plateau in 2018. Employers have typically relied upon these plans as a cost-controlling strategy. In an increasingly competitive market, employers will find it difficult to offer such plans, which have scaled-back benefits.
The upside is with over the counter drugs. Several patents for branded drugs have expired, bringing down the overall revenue from pharmaceutical sales in the U.S. For employers, this means that in 2018 there will be fewer opportunities to purchase less expensive generic drugs.
There is increasing pressure on Big Pharma to moderate drug prices. This scrutiny is expected to limit increases in price and bring less expensive alternatives to the market in 2018. The focus is on providing value and minimizing waste. Employers will have access to new treatments and technologies and will benefit from strategies such as limited prescription quantities.
Increased cost sharing with the consumer and lower utilization as a method of reducing medical costs will no longer be an effective strategy. Employers will have to develop new strategies to curb employee medical costs.
It is interesting that in the five years from 2011 to 2016, the insurance premium for employer-provided family coverage increased by 20 percent. With health spending continuing to outpace economic growth, the increased cost of health insurance is eroding into the ability of the consumer to pay for necessities such as food, housing, and transport. It is projected that in 2018, medical costs will continue to grow faster than the GDP and take up an even bigger share of the economy. This will lead to increasing dissatisfaction with low-premium health plans that entail a high deductible and force consumers to forgo services such as preventive healthcare. In 2018, therefore, businesses will need to tackle medical costs in the new health industry landscape with a focus on both the price of services as well as utilization rate. In 2018, employers are looking at cost strategies like raising deductibles and adding a gap plan to cover the out of pocket medical expenses associated with hospitalization and diagnostic testing for the employees.
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