This is a year like no other. The cost reports reflected in the new Kaiser 2020 Employer Health Benefits Survey
are largely reflective of the environment prior to the pandemic. The self-insured costs represent COBRA premiums that were set last year and the plan designs all existed before COVID-19 hit.
The premiums reported continue to outpace inflation and wages at the same time the plan designs have deteriorated (high-deductible plans grew from 24% of the market to 31% of the market in the last five years but declined in the last year). Recent National Alliance survey data shows that drug and hospital prices are the biggest threats to employer-sponsored coverage.
Costs have fallen substantially during the pandemic as people have avoided visiting healthcare providers as much as possible. This is increasingly causing major concerns about patients missing high-value care. In the short term, health care claims will fall significantly short of the premiums (which increase 4% based on the survey) so numbers set last year will be substantially overstated. This is also leading to health plans need to deal with potential give backs due to minimum loss ratio.
While the environment may lead to short-term reductions in expenses, the longer-term outlook is not good. Employers fear a backlash from providers (who have been affected by a downturn for the first time in 40 years) trying to raise their prices and get the losses back (Rand 3.0
shows employers are already reeling from high and unpredictable hospital charge -- read the National Alliance Action Brief
titled Hospital Payment Strategies
). There are also growing concerns about employees and their families not receiving essential and high value care (e.g., immunizations, screenings, care for chronic and serious conditions), which could lead to serious downstream consequences.
Of note in the survey, only about one in five are very satisfied with the availability of mental health/substance use network providers (about half the percentage for networks broadly). This is a key focus of The Path Forward for Mental Health and Substance Use
which the National Alliance co-leads.
The National Alliance has just released several resources for employers related to the importance of emergency care, preventive care, and immunizations during COVID-19: