Total costs and premiums for state employer health benefits continue to increase despite ongoing efforts to mitigate and manage trend, such as plan design reductions and member incentives to promote healthy and efficient choices, according to a study from Segal Consulting.
Comparing states’ premium increases to those shown in the Kaiser Family Foundation and the Health Research & Educational Trust’s Employer Health Benefits Survey shows that states’ premium increases are higher than what large private-sector employers experienced recently.
States continue to implement new high-deductible/consumer driven health plans (HDHP/CDHPs) coupled with health savings accounts (HSAs) and health reimbursement accounts (HRAs), but there are stark geographic discrepancies to where it is offered. According to the study, 13 Southern States offer HDHP/CDHPs, compared to just two in the Northeast. They are offered in eight states in the Midwest and seven in the West.
States are, on average, are requiring employees to share more of the premium cost. The average total premiums for employee-only and family coverage in both preferred provider organization(PPO)/point-of-service (POS) plans, which are offered by nearly every state, and HDHPs/CDHPs have risen by double digits over the past year.
Most state plans are designed to try and influence employees to use more cost-efficient drugs and less expensive delivery channels. The average copayment for specialty drugs are $101 at retail and $182 via mail order.
“Health benefits have become more important to state leaders as the cost of coverage outpaces overall inflation, placing budget pressure on health plan funding and underscoring the need for ongoing cost-management efforts,” says Andrew Sherman, Segal’s national director of Public Sector Consulting. “Examining what other states offer can be helpful for these leaders when they make difficult decisions about potential changes in coverage.”
Segal Consulting’s 2017 State Employee Health Benefits Study is available here.