Trends Impacting the Rising Cost of Employer Benefits
It is no secret that the rising cost of healthcare in the United States has risen sharply over the past two decades and show no signs of slowing.
Employers now face the difficult task of reigning in increasing healthcare costs and keeping employee coverage affordable while trying to remain attractive to current and prospect talent despite their shrinking budgets.
What trends are causing higher cost?
The number of Americans 65 and older is expected to nearly double by 2025. As this population ages, there is a subsequent rise in chronic disease that will need management through prescription medications and additional tests/resources.
Soaring Prescription Drug Costs
Prescription drug costs continue to represent an increasingly large portion of healthcare expenses. In fact, global spending on prescription drug will reach nearly 1.9 trillion by 2027, according to the Institute for Human Data Science.
Weakened Manage Care System
Many employers previously favored offering health plans that allowed out-of-network providers or had less strict referral processes. They’d also make health plan purchase decisions focused on keeping employees happy. With the level of premium increase over the last few years, many employers have backed away from offering such rich benefits and instead have restricted networks to reduce costs.
Increase Utilization and Consumer Demand
Utilization of many healthcare services has risen over the last decade. Several factors, such as improvements in medical technology, the influence of managed care, and elevated consumer awareness and demand, cause many health services to rise scientifically.
Low Healthcare Literacy
Low health literacy often results in higher utilization of basic and expensive healthcare services such as ER visits and inpatient services. More than 33% of Americans have difficulty with common health tasks, such as reading prescription drug label or making an educated healthcare decision, according to the U.S Department of Education National Assessment of Adult Literacy.
As costs for healthcare, and everyday items continue to rise for Minnesotans, SBG is here to help you navigate the employee benefits market. As a local broker, they can compare different insurance companies AND insurance types. Contact them for a free, no obligation quote!