By Peter Johnson
Several recent surveys on employer-sponsored health insurance have found that plan sponsors are following three major trends: expanding virtual care and telehealth benefits, narrowing provider networks and emphasizing centers of excellence in their benefit designs.
According to the 2020 edition of the Kaiser Family Foundation’s (KFF) Employer Health Benefits Survey, this year’s annual premium growth (4% for individuals and families) outstripped both wage growth (3.4%) and inflation (2.1%).
Other surveys project similar results in 2021, but caution that the pandemic saddles employers with unprecedented risk and uncertainty when setting premiums. The main cause of that uncertainty is utilization. Health insurers reported a dramatic fall in claims during the second quarter of 2020, but indications are that utilization begun to return to somewhat normal levels in the third quarter.
“There’s a lot of chatter specifically about [Affordable Care Act] marketplace insurers and about how they are experiencing fewer claims than expected,” says James Gelfand, senior vice president for the ERISA Industry Committee. “That’s not what I’m hearing from member companies. They feel like they’re under the same dynamic that they’ve been under for a decade: costs are going up, and the things they’re doing to try and save money have had a very mediocre effect.”
That tension has led to the emerging trend of narrower networks. Lowering costs and reducing unnecessary utilization is a key goal of narrowing provider networks, along with emphasizing quality and return on investment.
“This is something that a lot of providers out here are realizing: the ones that did not embrace value-based care before the pandemic and continued on fee-for-service — they’re the ones that are really struggling….I think this potentially could push more [providers] into that avenue,” says Drew Hodgson, the national practice leader for health care delivery at Willis Towers Watson.
Hodgson adds that “a lot of employers are looking at [centers of excellence] more than they ever did. Mainly because of the fear of the rising costs right now, and they think they can control costs.”
Concerns about COVID-19 exposure have caused a boom in virtual care and telehealth utilization, as patients have avoided in-person clinical visits. Hodgson says that plan sponsors and insurers need to determine how virtual visits will fit into benefit designs going forward.