There’s no question that healthcare premiums have gone up in recent decades. In particular, health insurance premiums have seen a sharp uptick in the last 10 years compared to the rate of increase observed at any time in recent history.
According to some healthcare surveys, while rate increases hovered around 2% in 2020, experts predict that rates could increase as much as 5% by the end of 2022. This represents a big shift in expenses for both employers and workers who get their health insurance from employer-sponsored plans.
What’s Behind the Rise in Premiums?
There are several factors behind the rise in premiums, not the least of which are inflation concerns and stock market volatility. Many people, including those in the health insurance industry, are rightfully concerned about the cost of goods and services going up, and this can lead to a shift in premium prices to cover ever-increasing expenses.
Additionally, healthcare regulations introduced over the past 10 years have placed insurance providers and healthcare service providers in a tight spot. They now have to offer more services to more people which may end up costing more money. In addition, the uncertainty that affects the stock market has also affected the healthcare service and insurance sectors as it remains to be seen how severe the long-term effects of changing regulations will be.
What Can Be Done?
Although employers who provide healthcare insurance benefits often have little to do with what goes on in Washington or on Wall Street, employers can take a look at their 2022 benefits planning strategy to see if things make sense. Your 2022 benefits planning strategy may have looked solid on paper going into 2022, but perhaps it isn’t working out so well as the year has gotten started.
You’re now experiencing the effects of higher premiums on your bottom line, and you may be looking for ways to curb costs. This may be a time to consult with an insurance brokerage to discuss your company’s needs and see if other plan options may work better, both now and into 2023.
Read a similar article about section 125 cafeteria plan here at this page.
