Rising healthcare costs for employees are nothing new. But in 2018, experts are predicting the highest increase we’ve seen in 3 years. In fact, employee healthcare costs are expected to rise 7.2% next year, up from 2017’s 6.9%.
The study found that rising prescription drug prices are a big factor in the increasing costs.
Let’s dig a little deeper into this. Rising drug costs and increasing deductibles on their own can cause a blow to any employee’s pocketbook. But put them together and you’ve got a perfect storm.
- Average deductible has risen 67% since 2010
- Rx costs are predicted to increase 5% for the 5th year in a row
Now where these two negatives make a super negative is when you factor in that deductibles are now including Rx costs more often. This wasn’t always the case in the past.
Before major cost-shifting took place, insurance would either pay first-dollar or coinsurance on their Rx expenses. But now employers are having to pay for prescriptions 100% out of their own pockets because it’s taking longer for them to meet their increased deductibles. That means employees could be out thousands of dollars just from prescriptions before any coverage kicks in!
How can an employer or broker address and attempt to solve this problem?
Indemnity plans won’t work, because they won’t provide coverage for everyday prescription expenses. Indemnity plans and other worksite voluntary plans also don’t kick in unless a specific event happens or disease is diagnosed.
What you can offer to offset some of these costs is a supplemental expense reimbursed insured plan. Everyday prescription expenses are covered, along with deductibles, coinsurance and co-pays, and they don’t require an event to activate coverage.
With the highest hikes in the past 3 years headed our way, it’s time to get prepared!