Survey finds employers expect health benefit costs to rise 3.9% in 2020 • Northwest Indiana Business Magazine
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Survey finds employers expect health benefit costs to rise 3.9% in 2020

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Health CarePreliminary survey results from consulting firm Mercer show U.S. employers expect health benefit costs will increase 3.9% in 2020.

New York-based Mercer’s early results from its National Survey of Employer-Sponsored Health Plans is based on responses from 1,511 employers with at least 10 employees or more.

“While this continues the trend of low single-digit increases that began in 2012, health benefit costs are still rising faster than overall inflation,” said Tracy Watts, Mercer’s national leader for U.S. health policy. “And with the economy slowing, employers know they can’t afford to be complacent.”

Preliminary results show cost-shifting to employees will be less of a factor than in recent years, with 43% respondents raising deductibles or cutting benefits to hold down costs in 2020.

Since 2014, the underlying medical trend — the amount costs would rise if employers renewed plans without making changes — has cooled from between 5% and 8%, which has eased pressure to make short-term cost cuts, Mercer said.

In the past five years, employers have been adopting tactics to reduce costs via improved health outcomes, including targeted support for specific health conditions and steering plan members to higher-quality providers.

“Rather than shift cost to employees, these approaches typically enhance the health care experience,” Watts said.

Mercer said employers also continue to add tech-enabled programs designed to help members with specific health issues including diabetes, insomnia, and infertility.

In 2019, 62% of respondents with 500 or more employees offer one or more of solutions, compared to 55% in 2018. A program for diabetes, for example, can improve quality of life while reducing high-cost trips to the emergency room, Mercer said.

Improving access to health benefits information and resources is another growing trend. In 2019, 40% of respondents with 500 or more employees said all or most of their benefit offerings are accessible to employees on a single, fully integrated digital platform – most often through a smartphone app – compared with 34% in Mercer’s 2018 survey.

“Employers have been experimenting with new approaches to tackle high costs, inconsistent quality, and low patient satisfaction,” Watts said. “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.”


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