The start of new year often means changes to your group health insurance benefits. So, what can you expect in 2024? Let’s look at three things you’re likely to see during the year.
Rising Health Insurance Premiums
According to multiple studies by Mercer, Aon, and Willis Towers Watson, among others, employers should expect to see somewhat higher health insurance premiums in 2024. The exact percentage increase for your group (if you currently have coverage) depends on your plan type, carrier, and region. The increase could range from one to five percent or as much as 10% or more.
On the public exchange, Covered California said its average health plan rate is up 9.6%. The participating carrier rate bumps range from a low average of less than one percent to a high of nearly 16%. The increases are being attributed to medical inflation, labor shortages, and related wage increases, higher demand for services, and increased medication costs – especially expensive weight loss drugs and cell and gene therapies.
Continuing Consolidation of Players
Health insurer, hospital, and health system merger and acquisition (M&A) activity declined during the past few years, mostly attributable to the COVID-19 pandemic. However, M&A began to rebound in 2023. More deals could follow this year.
While a few joint ventures or integration plans have been scrapped in recent months, others are on track or recently closed. One deal affecting a major California player is the acquisition of Geisinger Health Plan of Pennsylvania by Kaiser Permanente. The deal calls for a separate nonprofit branded as Risant Health. Kaiser Permanente says it expects to invest $5 billion in Risant during the next five years. It could make new deals with as many as six nonprofit health systems.
After several missteps, Amazon may be back on track with its expansion into health care services. It shut down Amazon Care in late 2022 but made some steps forward in 2023. It acquired One Medical in Q1 last year and announced in November a discount for Amazon Prime members who want to use One Medical for primary care. This service is in addition to the RxPass services available to Prime members who want to have prescriptions filled monthly at one low price. More services could be added by Amazon in the months and years to come.
Escalating Rx Costs
Reuters reported in late December that drugmakers will raise prices on at least 500 drugs this month. Manufacturers on the list include Pfizer, Sanofi, and Takeda. Pfizer stood out among others with increases on more than a quarter of all affected medicines. The company is boosting prices on 124 doses or formulations, as well as another 22 treatments from its sterile injectables arm, Hospira. Takeda’s Baxalta had increases this month on 53 drugs, followed by UCB Pharma with increases on 40 products. More price increases from other firms could come before the end of January.
Analysts are monitoring the pharmacy industry’s legal battles in response to Medicare’s new price negotiation program. The program was among the provisions of the Inflation Reduction Act (IRA). The IRA was signed into law by President Biden in August 2022. In August 2023, the U.S. Department of Health and Human Services (HHS) announced the first 10 drugs to be included in price negotiation. Industry groups and drugmakers have filed multiple lawsuits to stop the price negotiation program. Ultimately, one or more cases could wind up in the U.S. Supreme Court. The fear for many is that changes to pricing for Medicare could impact pricing for commercial insurance plans as well. Time will tell.
Talk With a Broker
Your health insurance or employee benefits broker can help you find a health plan that addresses your employees’ needs and still helps you control your benefits costs. Ask your broker for a personalized quote for your employees. If you don’t have a broker, we make it easy to find one.
