How drastic will health cost increases be in 2013?

It’s no surprise healthcare costs will increase in 2013. They increase every year. But what may surprise you is the extent to which they’ll increase.
PricewaterhouseCoopers (PwC) Health Research Institute — using input from health plan actuaries, industry leaders, analyst reports and 1,400 employer surveys — is projecting a growth rate of 7.5% for overall healthcare costs.
Now that number on its own may not seem that surprising to some, but it’s actually pretty low when compared to the double-digit increases companies became used to seeing just a few years ago.
The reason for slowed cost increases: With the recession came a reduction in the use of medical services by cost-conscious consumers, along with increased efforts by employers to hold down healthcare cost increases — efforts companies say they’ll continue in 2013.
The two primary strategies are using to keep costs down:

  1. Expanding wellness offerings, and
  2. Increasing employees’ share of costs.

Wellness programs
According to PwC’s research, 72% of employers currently offer wellness programs.
The most popular offerings:

  • Employee assistance programs (84% of employers with a wellness program offer and EAP)
  • Health risk assessments (80%)
  • Biometric screenings (71%)
  • Smoking cessation programs (67%)
  • Disease management programs (58%)*, and
  • Weight management programs (56%).

* Of those who offer disease management programs, the most common are for diabetes (63%), cardiac disease (56%), asthma (54%) and cancer (39%).
Cost sharing
Here’s are the most popular cost-sharing strategies:

  • Increasing employee contributions to pay for health insurance premiums (31% said they’ve already done this and 57% are considering it)
  • Increasing prescription drug plan cost sharing through plan design changes like higher co-pays and deductibles (21% with 52% considering)
  • Increasing medical plan cost sharing through plan design changes like higher co-pays and deductible4s (34% with 50% considering)
  • Implementing a value-based design (6% with 45% considering)
  • Implementing a high-deductible plan as a full replacement option for medical benefits (13% with 42% considering)
  • Implementing a performance-based network (4% with 41% considering), and
  • Offering a health savings account (33% with 40% considering).