Latest news with #BusinessGrouponHealth
Axios
10 hours ago
- Business
- Axios
Workers to bear brunt of health cost increases in 2026
Big employers who've tried to insulate workers from rising health costs are preparing to share the pain next year in the form of higher premiums to reflect year-over-year increases of as much as 10%. Why it matters: The added costs will hit workers already reeling from inflationary pressures and reflect a change in thinking for corporations that have tried to maintain generous benefits in tight labor markets. "The story this year is perhaps more daunting and sobering than it ever has been," Ellen Kelsay, CEO of Business Group on Health, said on Tuesday. By the numbers: A survey the group released of 121 large employers insuring 11.6 million people found companies' medical costs sharply outpaced their expectations over the past two years. They are now projecting health costs to jump a median of 9% next year absent any cutbacks in benefits to offset the increases. Employers in Mercer's annual survey forecast a more modest 5.8% increase next year while a separate survey from the International Foundation of Employee Benefit Plans projected a median increase of 10%. Between the lines: The cost pressures in some ways mirror the experience in Affordable Care Act and other insurance markets that have seen costs surge on higher demand for health procedures and tests and rising drug costs. Cancer is the top driver of employer health costs for the fourth year in a row, as diagnoses increase and treatment costs grow, according to the Business Group on Health survey. Employers have also expressed concerns about pricey biologic drugs, anti-inflammatory specialty drugs and the soaring demand for GLP-1s for obesity. In 2024, pharmacy expenses accounted for nearly a quarter of all employers' health care spending (24%), and the companies project an increase of 11% to 12% next year, per the Business Group on Health. Employers appear much more reluctant to eat higher benefit costs. Mercer found 51% said they would be shifting costs to employees this year, up from 44% last year. "What we had been seeing in the data for quite a few years is employers really not doing a lot of cost-shifting," said Beth Umland, Mercer's director of research for health and benefits. "As we are entering our third year of elevated cost trend, employers are like, 'All right, we got it. We got to readjust this.'" They'll also scrutinize other employee health perks. "Employers are going to do some things much more aggressively ... in terms of holding their vendors accountable and exploring alternatives, because passing cost increases is a Band-Aid approach. It does not fix the long term," Kelsay said. What to watch: Nearly one-quarter of large employers will have alternative health plan arrangements in place next year, and another 36% are considering them for the future, per the Business Group on Health. Your employer might even introduce what they call a "high performance network" or "exclusive provider organization" this year. They sound suspiciously like the HMOs of old as they offer much narrower networks for participants, in exchange for lower rates. But they have key differences. For instance, patients have better tools and data at their disposal via apps on their phone to compare providers' cost and quality. "They are also, for the most part, avoiding the primary care physician gatekeeper feature. That's the HMO feature that just kind of turned out to be a lightning rod for a lot of people," Umland said. Zoom out: While the funding cuts and enrollment restrictions on public health insurance programs included in the GOP's tax-and-spending bill don't directly affect employer-sponsored health coverage, they'll likely have ripple effects. Two-thirds of employers surveyed by Business Group on Health reported being concerned about cuts to Medicaid and Medicare.
Axios
31-07-2025
- Business
- Axios
GOP tax-spending bill sets path for direct primary care boost
Providers of "direct primary care" who charge patients a monthly fee for unlimited visits and workups are poised to become big winners from the new Republican tax-and-spending law. Why it matters: The law for the first time allows patients to tap their health savings accounts for the concierge-like primary care arrangements, and lets employers extend both benefits, in the belief they're more efficient than the traditional fee-for-service system. The change aligns with a Project 2025 goal to promote more personalized and flexible direct primary care, and a GOP penchant for expanding the use of high-deductible health plans and their tax-advantaged savings accounts. The legislation"takes an impediment out of the way" for employers who want to improve their employees' primary care, said Jim Winkler, chief strategy officer for the Business Group on Health. "It certainly is helpful at a time when employers are very interested in that space." Driving the news: Starting next year, people who have a high-deductible plan and direct primary care membership through their workplace can contribute to an HSA. The ability to invest pre-tax dollars and spend them later on eligible health care expenses can lessen the burden of a large insurance deductible. About 21% of U.S. workers with employer-sponsored health insurance were enrolled in HSA-eligible high-deductible plans in 2024, according to KFF. Until now, the tax code disqualified people who use concierge care from contributing to an HSA. Employers are among those who advocated for the change, which had some bipartisan support, Winkler said. The bill also makes direct primary care membership fees an allowable HSA expense for people who don't get a subscription through their employer. The change opens the direct primary care market to more employers, said Rebecca Springer, director of market development at health care investment bank Bailey and Co. The share of employers offering direct primary care subscriptions grew a staggering 800% between 2017 and 2022, according to a report from direct care software platform Hint Health. Still, a relatively small number of employers offer direct primary care benefits. "It's certainly a tailwind for direct primary care," she added. Yes, but: There are still underlying challenges, tempering expectations of a big boost for the sector, she noted. Direct primary care is still a relatively small segment of health care, and it can be difficult to scale. It's also not very integrated with the broader health system. "What makes a direct primary care model really good for a patient is that they get to spend more time with the physician," Winkler said. Doctors also like the smaller patient loads. "Finding more primary care physicians — and we have a scarcity of that in our country — will be a challenge as this model grows," he said. "It's true of any version of advanced primary care that's rooted in how that physician spend more time with the patient." What we're watching: Whether more physicians start or join concierge care practices going forward. Many have been interested but hesitant to make the leap because until now, there hasn't been a clear financial incentive to help patients afford the services, which can cost up to $150 per month — on top of insurance premiums and specialist copays — for an individual under the new law, said Shawn Martin, CEO of the American Academy of Family Physicians. "Now that that exists, I think you'll see a lot more interest in the model," he said. AAFP's 2024 survey of doctors providing direct primary care found that 94% were satisfied with their overall practice, compared with 57% of doctors not practicing direct primary care.
