Forecast is mixed for health benefits in 2017 and beyond

The health insurance industry can expect to see more change in 2017, and employers are concerned about how potential new healthcare legislation may affect their employee benefits programs, according to a new report issued by Wells Fargo Insurance. Well Fargo points out that health insurance premiums have increased 213% since 1999, and that trend is expected to continue. Medical and prescription drug costs will most likely continue to rise, along with prices on specialty drugs. With regard to the latter, Wells Fargo found no indications that prices for medications used to treat complex, chronic, and rare conditions will decrease.

Attracting employees. According to the report, 75% of employers are concerned about employment retention rates for millennials, while only 28% plan to make changes to benefit plans to be more attractive to the millennial population. “In today’s environment, employers must work a little harder to improve the health of their population while minimizing increasing costs for their employees. Increasing the level of enrollment of the workforce into medical programs is also critical, especially for companies with a high percentage of millennials, who will make up half of the workforce by 2020, said Dan Gowen, national practice leader with Wells Fargo Insurance.

More telehealth and clinics. Wells Fargo also predicts that both telehealth and in-person clinics will play a role in the delivery of care in 2017 and beyond. Telehealth includes virtual medical services through live video and digital-and-monitoring tools. Convenience care clinics, like those offered in grocery stores and pharmacies, will also remain attractive to consumers this year, particularly as access to primary care becomes more difficult.

Cost containment. Wells Fargo states in its report that employers are getting better at managing their employees’ health-care costs. Strategies include bundled payment models, which reimburse health care providers on the basis of the costs that would be expected for certain types of care, reference-based pricing, which involves a cap on the most an employer would cover for medical services with widely varying costs, and centers of excellence, which Wells Fargo says can be utilized to manage domestic medical tourism, second opinions, bundled payment systems, referenced-based pricing, and positive clinical outcomes via strict medical management.

SOURCE: Wells Fargo Insurance press release, January 25, 2017 and “2017 Employee Benefits Outlook.”

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