Employer-Sponsored Insurance Costs to Rise 8.5%

Although inflation has influenced other industries, healthcare has remained steady due to multi-year contracts. However, according to a study by consulting firm Aon, medical providers are pushing payers to cover more costs that increased due to the pandemic. This means that employer-sponsored insurance is rising. Employers are expected to pay $15,000 per employee starting in 2024, compared to $13,906 per employee this year.

Medical providers saw an increase in their costs due to the pandemic, including labor costs and supplies. At the time, they were unable to pass along these increases to payers, however, that’s expected to change in 2024. Adding to the expected rise in costs are weight loss drugs which are expensive, the severity of catastrophic claims, and an increase in the need and use of specialty drugs.

Source: Medical Economics

What's the Ideal Health Plan?

Most people don’t understand their health benefit plans and as a result, end up spending more money every year. Plans are often complex and contain terms and jargon that people who aren’t in the industry simply don’t understand. Most employees simply choose to stay with the plan they currently have rather than research other options. For example, many people choose a more expensive plan with a lower deductible, even though they are healthy and don’t have chronic health conditions. These plans cost employees the money they could be saving.

The ideal plan for someone with no chronic health issues is a higher deductible plan combined with a Health Savings Account (HSA). This allows the employee to save money while still offering coverage for catastrophic events. The HSA will also travel with the employee if they leave the job. Investing $5000 a year in an HSA will allow an individual to have $500,000 in benefits in 25 years. This can then be used for long-term care expenses.

Source: Wall Street Journal (this article requires a subscription to read in its entirety)

Large Payers May Edge Smaller Payers Out of System

The landscape of healthcare is changing as large payers grow and enter into other areas of healthcare such as pharmaceuticals, home health, and even primary care services. The largest payers, including UnitedHealth Group, offer insurance benefits under UnitedHealthcare and other services through Optum. Anthem (now Elevance), launched Carelon, a healthcare services brand that offers everything from behavioral health to palliative care. Humana, Cigna, and Blue Cross Blue Shield all have their own branches of health care services as well. Where does this leave smaller payers?

Smaller payers may be pushed out of the marketplace as these healthcare giants take up more space in the market. Robert Pearl, MD, is a professor at Stanford University and the former CEO of Kaiser Permanente’s health group. Pearl observed, “If I'm an insurer today that is not affiliated with any of the retail giants or other big groups, I'd be very worried they're going to take my patients away and drive me out of existence."

Source: Becker’s Payer

Portion of “No Surprises Act” Challenged in Texas Federal Court

The Texas Medical Association (TMA) filed a lawsuit in November claiming that the current process in which qualifying payment amounts (QPAs) are calculated gives an unfair advantage to payers. On August 24, a Texas federal judge agreed with the TMA. This is the fourth lawsuit filed by the TMA against the Department of Health and Human Services (HHS) since the law was enacted in 2021.

Earlier in the month the same judge sided with the TMA on a claim that the federal government didn’t follow the proper notice and comment requirements when they raised administrative fees. As a result, HHS paused its independent dispute resolution process until federal agencies receive more instructions on how to proceed.

Source: Fierce Healthcare

Will PBMs Become a Thing of the Past?

Blue Shield of California recently severed its contract with CVS Caremark to manage the payer's pharmacy benefits. Instead, Blue Shield partnered with Amazon Pharmacy and Mark Cuban's Cost Plus Drugs as preferred pharmacy providers. CVS will, however, continue to administer specialty drug benefits. Blue Shield's CEO, Paul Markovich believes that other insurers will follow suit in abandoning the PBM model.

Markovich said the decision to leave PBMs for non-specialty drugs is more consistent with how they want to do business in the future. While he doesn't view PBMs as inherently bad, Markovich believes that competition will make the administration of pharmacy benefits less costly. Markovich estimates the company will save up to $500 million annually with the new model.

Source: Becker's Payer

SIIA Conference

The Complete Health Systems team will be at the SIIA Conference October 8-10 in Phoenix, Arizona. If you attend the conference, please stop by and visit our booth (#400). Thank you and hope to meet you soon!

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