0 Comments | Apr 10, 2010

Double-Digit Dilemma: Dire Healthcare Cost Predictions

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Recent healthcare legislation changes have given business owners reason to fear rising employee healthcare expenses. The news wasn’t good before the law passed, and it certainly hasn’t improved since.

We ran across a recent report in which over 100 insurers covering 78 million people predict an average medical plan cost increase of over 10 percent in 2010. Some lowlights:

  • Federal mental health parity requirements and recent COBRA enrollment increases add to the impact of healthcare reform to shape the prediction, according to Buck principal Harvey Sobel.
  • Projected increases in preferred provider organization (PPO), point-of-service (POS), health maintenance organization (HMO), and high-deductible consumer-driven (HDCD) plans range between 10.3% and 11.1%.
  • This rate of increase has held virtually unchanged over the past three studies.

You’re undoubtedly deep into the wellness arena already in an attempt to mitigate healthcare costs for your business (if not, it’s probably time to consider it seriously).

Many programs are easy to implement and sound good on paper, but garner little employee participation (Sue Schick reports that smoking cessation, for example, has a 4% adherence rate). If you’ll permit a little bragging, we’re happy to report that our Vacation Wellness™ program has an 89% four-year retention rate for those who have taken at least one destination vacation through our travel partners. It’s nice to implement an employee wellness benefit that doesn’t require constant harping to gain worker involvement.

We’ve put together a white paper to help business owners make sense of the healthcare cost and employee wellness program arena. While the news isn’t terrific (or even very good), an effective wellness plan offers a ray of hope for businesses to control employment expenses in an out-of-control healthcare cost environment.

Whether you choose beaches, broccoli, or both for your employee wellness program, be sure you’re doing something to stay ahead of the looming train wreck. It could get ugly.