Annual family premiums for employer-sponsored health insurance grew 5% to average $20,576 this year, according to new research from the Kaiser Family Foundation.
“We used to say the average premium was roughly the equivalent of buying a new car. At this point, annual premiums cost more than a car with some of the nice upgrades,” Matthew Rae, associate director for the Program on the Health Care Marketplace at the Kaiser Family Foundation, said this week during a webinar from the group.
Employers and employees are sharing the cost. On average, workers this year are contributing $6,015 toward the cost of family coverage, with employers paying the rest.
Meanwhile, a quarter of people with employer coverage said they had difficulty affording their deductible, Rae said.
“[Many employers] have reached a point where [they] can’t raise deductibles much more, either because of concerns for affordability for employees or because [they’re] trying to attract or maintain a qualified workforce and it might not work [if they raise costs more],” said Cynthia Cox, vice president at the Kaiser Family Foundation.
Employers can consider a number of other cost-saving initiatives, Cox said, including narrow networks, direct contracting, onsite clinics and centers of excellence. But despite the success of those network configurations, utilization is fairly low, pointing to future opportunities for employers to reduce the cost of care for their employees and their company, the researchers said.
“There are some clear benefits to using network configuration as a way to either reduce cost or improve quality or in some cases do both at the same time,” Cox said.
Results were gleaned from the Kaiser Family Foundation’s 2019 Employer Health Benefits Survey and findings from three focus groups with 25 human resources managers. One focus group was held at Human Resource Executive‘s Health and Benefits Leadership Conference earlier this year.
“Generally speaking, strategies like these that have the most potential for disruption of care for employees have the lowest adoption rates,” said Daniel McDermott, Kaiser research assistant.
While allowing employees to get coverage at retail clinics is offered by 82% of employers with 50 or more workers, onsite or near-site clinics are offered by just 20% of employers. Tiered networks are offered by 14% of firms with 50 or more workers, direct contracting by 8% and narrow networks by 5%. And just 19% of employers encourage enrollees to receive care at a center of excellence.
Even telemedicine, which is a rising benefit, isn’t having as much success as it could. Although 90% of employers offer a telemedicine benefit, employees have been slow to adopt the service.
“A couple members of the focus group actually said they decided to drop telemedicine as a benefit because utilization was so low that it didn’t really justify the added cost on their health plan,” McDermott said.
Still, many of the focus group participants reported telemedicine as a potentially valuable supplement for their workers “because of their ability to triage and treat certain illnesses and conditions that don’t necessarily require trips to the ER or more traditional sites,” he said.
The reason some of these strategies are not taking up at a big rate is because there are a number of barriers to implementing them.
“There’s an issue of capacity to implement some of these,” Cox said. “Something like direct contracting can take up a lot of your own time and effort and requires a lot of sophistication to figure out which providers are the best ones to contract with and so on.”
Another barrier is a lack of information. “That could be as simple as brokers or insurers not educating you to give you the information you need to even know these are options,” she said. “Some of these concepts seem to be new to many [HR professionals].”
A lack of data and allaying employee concerns over what network changes mean for them are also barriers.
Doing research, getting the right information and communicating the benefits of these arrangements to workers can help break down these barriers, the researchers said. Offering employees “a carrot” in certain instances also may help, McDermott said. One focus group participant, for instance, lamented that employees weren’t really using telemedicine the first few years they offered it, McDermott explained. But when the company made the decision to drop the telemedicine copay from $15 to $0, it tripled their utilization rate.
“If employers are willing and able to use a carrot to incentive their employees to use it, it’s definitely more likely their employees will take up the service,” he said. “Some employees may need incentives to make a jump.”
Kaiser Family Foundation researchers will present findings and strategies for reducing healthcare costs at the Health and Benefits Leadership Conference in April in Las Vegas.