Though slower than the worst spikes of the last decade, American companies and their workers continue to see healthcare costs increases, putting pressure on insurers to respond with new exchanges and plan designs.
The average health care premium rate increase for mid-size and large companies in 2014 was 4.4 percent, up from 3.3 percent in 2013, according to a new study by Aon Hewitt. In 2015, the consulting firm projects average healthcare premium increases will be 5.5 percent after accounting for plan changes and vendor negotiations.
The average healthcare cost per employee in 2014 was $10,717, up from $10,266 in 2013, Aon Hewitt's analysis found. The portion of the total health care premium that employees were asked to contribute toward the premium cost was $2,487 in 2014, up more than $100 from $2,355 in 2013. Average employee out-of-pocket costs coinsurance and deductibles, increased from $2,005 in 2013 to $2,295 in 2014.
Including the projections for 2015, employees' share of health care costs will have increased more than 52 percent over the past five year, from $3,389 in 2010 to $5,151 in 2015, according to the study.
"Over the past few years, the overall economic situation kept consumer spending on discretionary items, including healthcare, down, and we observed a lower rate of premium increases," said Tim Nimmer, chief health care actuary at Aon Hewitt. "Now, with employment rates stabilizing, individuals are feeling more secure about their financial situation and have been willing to re-engage in using the health care system. As these utilization rates increase, we expect to see health care cost increases follow."
For 2015, Aon Hewitt projects average healthcare costs will increase to $11,304 per employee. Employees will be asked to contribute 23.6 percent of the total healthcare premium, or about $2,664. Average employee out-of-pocket costs are expected to be $2,487.
As costs have increased over the past decade, companies have adopted a number of strategies.
According to Aon Hewitt, high-deductible health plans have surpassed HMOs as the second most popular plan. Fifteen percent of companies offer a HDHP as the only health plan option today, and another 42 percent are considering doing so in the next three-to-five years, according the study.
More employers are also "gating" their health benefits, requiring employees to complete a task, such as a health risk assessment, to access richer design options. Some companies offer a basic high-deductible plan to their entire workforce, but make a richer PPO option available to those employees who complete a health risk questionnaire or biometric screening.
Among other findings in the Aon Hewitt study, 22 percent of companies have reduced subsidies for covered dependents, 18 percent added a surcharge for adult dependents, and 52 percent of companies are considering using unitized pricing, where employees pay per person and not individual versus family.
Of course private exchanges are also an attractive option that can expand choices for workers while giving employers more predictable costs. Across the 18 companies returning to Aon Hewitt's own exchange, plan rates are set to increase average of 5.3 percent for 2015.