WTW Best Practices in Health Care Survey
October 27, 2023
Health care premiums, wages, and inflation
Source: WTW Best Practices in Healthcare Survey, October, 2023 LINK
Magenta is premium change before plan design changes, and the gray bar is premium change after design changes. This demonstrates continued decreased actuarial value of health care plans.
The WTW Best Practices Survey was published this month and includes responses from 457 companies with a total of 7.3 million employees widely distributed in terms of industry and geography. The survey demonstrates that employers are highly focused on controlling costs (69% put this in top five priorities) and improving mental and emotional health offerings (63% put in the top 5 priorities). Respondents predicted a 6.4% increase in premium cost in 2024, and 4 in 10 (39%) projected that health care cost increases would be between 5% and 10%for the next three years. Most respondents (62%) said they would split their focus between cost management or talent management. Eighty eight percent of employers said they were confident they would continue to offer health care benefits to active employees in 10 years, the highest level since we started asking that question in 2009.
Other key points:
- Interest in virtual care and navigation assistance is high
- 38% of respondents said that they cover GLP-1 drugs for obesity, and about 10% said that they were using higher BMI requirements than recommended by various specialty societies (such as the American Gastroenterological Society and the Endocrine Society).
- Half (48%) said they used a center of excellence associated with their health plan; 10% said they used a carve-out vendor.
- Four in ten (39%) said they intended to perform a mental health parity audit in 2023, and a quarter (24%) planned or were considering in 2024-5.
Value based insurance design is common in pharmacy benefits, where 51% of employers report bypassing deductibles for high value preventive medications, and 47% report exclusions or higher cost sharing for low value medications.
Implications for employers:
- The labor market is still tight, and employers are concerned about increasing premiums, but also focused on talent and therefore reluctant to decrease plan value significantly.
- Estimates of average increases next year are the highest in a decade, and this will be tougher for some employers who will have cost increases that are substantially higher than average.
- Employers will continue to seek solutions that increase mental health access and are looking for help improving navigation and complying with mental health parity regulations.
- Employers expect to increase the amount of virtual care delivered to their members.
Hope you have a great weekend
Monday: Distribution of costs for generic medications in the pharmacy supply chain
Thanks for reading. You can find previous posts in the Employer Coverage archive
Please “like” and suggest this newsletter to friends and colleagues. Thanks!