Is Your Health Benefits Plan Ready for Rising Medical Costs?
As we near the end of 2022, you’re probably wondering what 2023 will look like for your business. When it comes to employee health benefits, a new Mercer report forecasts a rise in medical costs in the new year. There are a number of factors that are driving an increase; fortunately, there are also a number of things you can do to help mitigate an increase.
Medical Costs Increases Explained
Mercer’s MMB Health Trends 2023 report predicts a 7% increase in year-over-year medical costs on a per-person basis. Increases in health medical costs aren’t a new thing, but some of the factors that are driving the increases this time aren’t what we’ve seen in the past.
Over the last few years, the COVID-19 pandemic had an enormous impact on everything; employee health benefits weren’t exempt. Because of social distancing, remote services and fear of catching the virus, many people deferred their medical care.
Deferring medical care had some important implications. Mercer’s research showed an increase in later stage diagnosis of illness. Not getting timely medical care means illness or disease that may have been treated more effectively in the early stages progressed to more serious health challenges. The delay in getting treatment may have impacted treatment options, including prescription drugs required.
Rising inflation and supply chain issues are also contributing to an expected increase in costs for the coming year. While some of these cost drivers cannot be controlled, there are ways that you, as a business owner, can proactively work at lowering claims and claim costs.
Five Ways to Contain Your Costs
The best way you can prepare for rising medical costs in 2023 is to focus on prevention. Work on ways to support your employees in achieving better physical and mental health. Healthier employees will have fewer claims. You can also focus on ways to minimize claim costs by including the cost-containment and predictability into your benefits plan.
1. Target Prescription Drugs
Prescription drugs are a big cost driver for employee health benefit plans. With medical costs expected to rise, now is the time to look at containing prescription drug costs. Turns out, there are a number of ways to support employees with great prescription drug coverage, while also minimizing claim costs.
The cost for a prescription drug claim is made up of the dispensing fee, ingredient cost and markup on the ingredient cost. These costs vary based on where the prescription is filled. Whether a prescription is filled with a brand name drug or its generic equivalent also has an impact. Affecting these variables is the main goal of GroupHEALTH’s Smart Rx products. Smart Rx products encourage employees to purchase maintenance medication from our central dispensing pharmacy partner in order to receive full coverage. Employees still get the medication they need, but claim costs are minimized.
2. Contain Disability Claim Costs
Disability claims are another big cost driver for total employee benefit plan costs. One of the best ways to contain disability claim costs is to use disability management services when a claim does occur.
Disability management services mean a case worker acts as a liaison between you and your ill or injured employee. The employee receives support navigating the disability leave and a customized return-to-work plan to help them get back to work as soon as they’re able. You receive non-confidential updates to help you plan for the absence and the employee’s return to work. It’s a win-win for you and your employee. Research shows that the sooner an ill or injured employee returns to work, the more likely they are to return to pre-disability health. Remember: the shorter the absence the lower the claim cost.
3. Give Access to Virtual Healthcare
Including virtual healthcare as part of your benefits plan is a way to be proactive in containing costs because it helps ensure employees get medical care when they need it.
Virtual healthcare means employees can connect with a doctor or nurse practitioner using technology. It’s available 24/7, so it’s easy and convenient for employees to get medical care when they need it. It helps remove barriers associated with time and money required to travel to a doctor’s office.
Providing better access to healthcare can mean a decrease in deferred care and later diagnosis of illness. This can help tackle some of the causes of rising claim costs.
4. Focus on Wellness
“Wellness” means practicing healthy habits on a daily basis in pursuit of better physical and mental health. This means supporting employees so they can make positive changes in their lives.
There are many ways you can focus on wellness at your organization. As part of your employee health benefits plan, you can include a Wellness Spending Account. A Wellness Spending Account means you provide employees with a set amount that they can spend on eligible wellness expenses. This could mean new running shoes, fitness classes, ski passes or more. Having this money available to employees acts as an incentive for employees to get active. You can also encourage them to get active by offering free personal training sessions (like LIFT), subsidized gym memberships or yoga sessions in the workplace.
“Lunch and learn” sessions can also be helpful. You can use these to teach employees to manage stress, be conscious of nutrition, practice mindfulness and tackle mental health challenges.
A healthy lifestyle (eating right, exercising, getting enough sleep and prioritizing mental health) can be an effective way to prevent illness. This translates into fewer claims for your benefits plan.
5. Educate and Train
Providing employees with great benefits is just the first part of the equation. You also have to ensure they are educated on what benefits they have available and how to make claims.
Too many employees aren’t familiar with their benefits, so don’t actually use them. When employees know what support they have access to, they can use those supports to prevent further deterioration of physical and mental health.
It’s important to regularly communicate with employees about their benefits so they are top of mind when an employee experiences a health challenge. This may mean utilizing the company intranet, poster campaigns or quarterly lunch and learn sessions.
In addition to educating employees about benefits, it’s also important to train managers. Managers should know how to recognize when an employee is experiencing a challenge, how to approach it and what resources they can suggest to the employee.
These are just a few ways you can try to mitigate the claim cost increases that are anticipated for 2023. It’s important to protect the sustainability of your plan and target the cost variables that you do have control over.
Good Advice is Key
Are you prepared for increasing medical claim costs in 2023? Have you thought of how wellness and cost control measures can counteract some of the increases? Explore your options with one of our licensed advisors on the phone, or contact us for a comparison quote.
Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefits packages that work as hard as you do.
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