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More Employers Moving to These Health Plans

Companies looking to offset rising insurance costs in 2015 and beyond, survey finds

WebMD News from HealthDay

By Karen Pallarito

HealthDay Reporter

FRIDAY, Aug. 15, 2014 (HealthDay News) -- Many Americans with job-based health insurance will face costlier deductibles next year as more large employers embrace or expand so-called consumer-directed health plans, a new survey finds.

The shift to high-deductible, consumer-directed health plans is occurring as Fortune 500 companies and large public-sector employers grapple with rising health-care and insurance costs.

"Employers are looking to put their employees in the driver's seat" to help manage costs together, Brian Marcotte, president and CEO of the National Business Group on Health, said during a media briefing this week detailing the survey's results.

Consumer-directed health plans feature high deductibles and low monthly premiums. These plans are typically paired with a health savings account to help employees and their dependents pay out-of-pocket medical expenses.

"The idea is that consumers will use fewer services and become more prudent purchasers since they bear more financial responsibility for their consumption," said Caroline Pearson, a vice president at Avalere Health, a Washington, D.C.-based research and consulting firm.

Large employers are projecting a 6.5 percent increase in health-care costs in 2015, according to the survey. That's slightly below the 7 percent increase employers had forecast for 2014, before adopting health plan design changes -- such as moving to consumer-directed plans -- and other cost containment measures.

Large employers said they hope to whittle next year's projected increase to 5 percent. That's about two-and-a-half times the annual U.S. inflation rate, which stood at 2.1 percent through the end of June.

Expensive medical claims, chronic diseases such as heart disease and cancer, as well as overall medical inflation are the main drivers of rising health costs, employers said in the survey.

"If you're a large company that spends a half a billion dollars on health-care costs, a 5 percent increase is $25 million," Marcotte said.

Consumer cost-sharing is also likely to rise by 5 percent in 2015, he said.

Along with shifting to consumer-directed health plans, more employers surveyed said they'll encourage their health-plan participants to be better consumers and they'll add or expand wellness programs.

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