Workers can expect to see their health care costs increase only moderately in 2019, as employers are turning away from shifting costs to employees, and toward addressing the underlying drivers of cost increases, according to the findings of an actuarial analysis conducted by professional services firm Aon.

The projections, released on October 15, are based on an analysis of actual employer-based health plan results data from Aon’s Health Value Initiative database, which captures health care cost and benefit data for 497 large U.S. employers representing 10.9 million participants. The analysis showed that for 2018, the increase in employees’ contributions to the cost of their health plans was at its lowest level over the last five years, as the combined increase in the share employees contribute to the cost of the health plan through premiums and the costs at the point of service rose just 1.6% in 2018. Projections for 2019 indicated that these costs are likely to increase slightly over their 2018 levels.

The analysis also revealed that in 2018, health care premiums rose 3.5%, but employers passed along a lower 2.2% premium increase to employees, while absorbing a larger 3.9% increase to company costs. The results further indicated that after plan design changes and vendor negotiations, 2019 medical and pharmacy plans premiums are projected to increase 3.5%, or by the same percentage as in 2018.

Researchers emphasized that employers are increasingly seeking to manage health care costs by turning to personalized provider navigation and transparency solutions designed to help patients find high-quality, cost-effective care locally, or appropriate digital health and telehealth solutions.

The analysis found that around one-half of employers are considering adopting high-performance networks for addressing chronic conditions over the next three to five years; and that 29% of employers have already implemented center of excellence (COE) strategies for certain non-transplant procedures, while another 51% are considering doing so in the near future. Moreover, the findings showed that 15% of employers are already offering integrated delivery models to improve care delivery effectiveness, while another 54% of employers are currently piloting them; and 20% of employers offer value-based insurance design approaches, while another 59% are considering doing so in the future.

The results also suggested that the pharmacy market is changing to address the cost and transparency of drug pricing practices, and that more transparency into the entire pricing structure of market participants, including drug manufacturers and pharmacy benefit managers, is needed. Researchers noted, for example, that because rebates have come to make up a substantial portion of the total cost of branded products over the last five years, there has been a growing interest in determining how much of those rebates are passed on to plan participants at the point of sale.

From Benefit Trends Newsletter, Volume 61, Issue 11

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