Business Group Blog

In First Look at 2017, Large Employer Plan Increases Hold Steady at 5%-6%

Plan Design

According to the just-released Large Employers’ 2017 Health Plan Design Survey, overall health care benefit cost increases at large U.S. employers are expected to hold steady at 6% again in 2017, and at 5% after plan design changes. Although this rate is similar to what it has been over the last few years, it is still twice the rate of general economic growth and twice the rate of wage growth, thereby threatening affordability. Meanwhile, employees can expect few major plan design changes from 2016, but can expect to contribute an average of 5% more for their coverage.

 

Specialty Pharmacy Expense Jumps to Top of Cost Concerns

When asked to rank their top three cost drivers, for the first time, most employers ranked specialty pharmacy costs as the top cost driver of health care spending increases. New medications coming to the market, higher utilization and high initial and ongoing unit prices of specialty pharmaceuticals are expected to contribute to rising costs over the next few years. Eighty percent of respondents listed specialty pharmacy as one of their top three cost drivers, and 31% listed it as their top driver. In 2014, only 6% of respondents indicated that specialty pharmacy was the highest driver of their health care costs. High cost claimants and costs associated with specific diseases were the next most common cost drivers mentioned by employers. Not surprisingly, in response, 74% of respondents expect to implement more aggressive utilization management for specialty medications in 2017.

 

Employers Turn Toward Optimizing Health Care Delivery

As consumer-directed health plans become widespread, with 84% of respondents offering at least one plan, employers are increasingly interested in optimizing health care delivery.

  • 85% are already offering or will offer transparency tools for employees
  • 90% will offer access to health services via telehealth
  • 85% will offer centers of excellence
  • 24% will offer accountable care organizations (ACOs) and
  • 26% will offer selective networks while and additional 34% will consider adding them for 2018-2019

Full survey results are available for NBGH members.