Future Trends in Employment, Health and Labor

Transcription

1 Future Trends in Employment, Health and Labor PRESENTED BY: Mike Wojcik, MBA,CLU,CFP Senior Vice President Public Sector Practice Group The Horton Group 1

2 Agenda Affordable Care Act / Legislative Update Municipal Health Plan Challenges State of Healthcare & Health Insurance Emerging Trends and Strategy to Control Cost 2

3 Affordable Care Act - Legislative Update 3

4 Affordable Care Act / Legislative Update Original Three Main Goals Greater Accessibility for All Greater Affordability for All Bend the Cost Trend Three Market Segments Impacted Nonworking Poor with No Coverage: Medicaid, Medicare Working Poor with No Coverage, Marketplace - Subsidies Employer Based Insurance 4

5 Accessibility Improved CMS Final Snapshot of 2019 Federal Exchange Open Enrollment Period Remained Steady. 8.4 Million consumers enrolled vs 8.7 million at the same time last year. Illinois enrollment was 312,280 in 2019 and 334,979 in

6 Affordability & Trend Did Not! Premiums 259% Workers Contribution 239% Earnings 68% CPI 51% 6

7 Employer Plans Remain Challenged! #1 Benefit to Healthcare for a family of 4 tripled since 2001 Rising Medical and Rx Trend Attract Talent Cadillac Tax GASB 74/75 Liability ACA Compliance HIT and Medical Device Taxes 7

8 What You Need to Know for 2019 Legislative Impacts Chain of Events: The 2017 tax law set the Individual Healthcare Mandate Penalty to $0 for As a result.. In December 2018 Texas Judge Reed O Connor ruled the ACA unconstitutional and therefore invalid. However: Case will go to Appellate and possibly the Supreme Court to ultimately decide target 2020 for any action. 8

9 What You Need to Know for 2019 For Now: The Affordable Care Act (ACA) is still in effect Stay the Course. A Few Reminders: All Compliance and Penalties will still be enforced. Keep up with reporting deadlines. Individual Mandate Penalty is $0 in HIT and Medical Device taxes return in Cadillac Tax starts January New: EEOC vacates Wellness Incentive Rules until 2021 default to guidelines previous to

10 Executive Orders Impacting 2019 Seeking More Competition and Lower Cost Options Association Health Plans Approved. Short Term Medical Plans Approved (vary by state). Health Reimbursement Arrangements (target 2020). Employer can waive coverage by class and formalize an HRA stipend that employees could use to purchase Individual Insurance on their own. Employer compliance and reporting would still be required. Final comments were submitted December 28,

11 Public Sector Health Plan Challenges 11

12 Three Factors Impact Premiums Demographics Risk Trend - Influenced by network discounts, plan design and utilization. 12

13 Unique Impacts To Public Sector Influenced by Participation of Older Generation Brackets including Retirees 12% fewer Singles, 28% more Families 28% Greater Risk 13

14 Horton Municipal Generation Chart All Participants All Participants 3% 1% 25% 28% 33% 27% 39% 44% Millenials ( ) Generation X ( ) Millenials ( ) Generation X ( ) Baby Boomers ( ) Veterans ( ) Baby Boomers ( ) Veterans ( ) 14

15 Risk Pool Will Slowly Change Through Attrition 15

16 State of Healthcare and Health Insurance 16

17 Healthcare Continues to Grow! Healthcare is 18% of the Nation s GDP Healthcare Spending up 4.8% to $3.58 Trillion Per capita spending hit its highest level at $10,739 pp. Largest job source in the US mostly due to Nation s aging population. Surpass manufacturing and retail. Half of the 30 fastest growing occupations are healthcare related. In 2019, for the first time ever, there will be more Americans over 60 than under the age of 18.* *USA Today 17

18 Costs Also Continue to Grow! Medical trend is up 4.5%, Rx up 6% 2018 Milliman Medical Index family of four PPO plan is $28,166, up $1,222 from

19 Factors Driving Cost Study of Commercial Members 2012 to 2016*: High-Cost Claimants (HCC) - $100,000 annually increased 70%. Those with $500,000 or more in claims doubled. 38% of HCC were in the age group, 21% in % of all High Cost Claimants were driven by specialty drugs. Common conditions were cancer, end-stage renal failure, neonatal issues, hemophilia, sepsis, or other rare diseases. *Blue Health Intelligence 19

20 Factors Driving Cost - Rx Pharma TV ads sored to $3.7B in 2018 vs. $3.45B in out of 1,000 people exceed $50k in Rx costs each year. Prescription drug spending for BCBS members increased 10% annually, 73% in 7 years.* Brand Rx accounts for 18% of Scripts but 78% of spend! 5 new Specialty drugs expected each year for the next 5yrs., each costing more than $50,000 per year. Luxturna = $850,000. *Blue Health Intelligence 20

21 Factors Driving Cost - M&A 42% of the Nation s Physicians are Hospital employed 25% are owned by Larger Practices, Private Equity and Insurance Companies 33% remain Independent *Avalere Health Study 21

22 Discounts vs. Actual Pricing * chcic * Chicago Tribune Blue Cross Blue Shield, United Health Care 22

23 Do Members Know The Real Price? 23

24 State Of Health Insurance Carrier bottom lines have improved since start of ACA. Trend has fallen to mid-single digits, mostly due to plan changes and lower utilization. Rx still runs higher than Medical. Group plans maintain richer offerings than individual Marketplace, especially Public Sector. More groups are moving to self-funded programs or some form (level-funded). A bump in stop loss reinsurance, pooling charges due to HCC frequency, but a lot of market capacity remains. Some growth in pooling risk: Associations, Co-Op, Captives. 24

25 Emerging Trends / Strategy To Control Cost 25

26 Have We Reached A Tipping Point? Malcolm Gladwell, Author: The tipping point is that magic moment when an idea, trend or social behavior crosses a threshold, tips, and spreads like wildfire. Current Concerns Consumers are unhappy with status quo in healthcare.* Trust in the U.S. Medical system eroded from 80% in 1975 to 36% today.** 62% of adults favor a Medicare for All option over the status quo and 75% say they prefer it as a public option for any who want it.** What will our newly elected officials propose? * Gallup Poll ** Kaiser Family Foundation 26

27 Employers Taking More Control Now! 1. Consumer Engagement (HDHP-HSA) 2. Transparency - Redirection of Care 3. Rx Solutions 4. Well-Being Management 5. Moving to Human Capital Management 27

28 Enrollment by Medical Plan Type* *Pwc touchstone report

29 HDHPs Win On Performance Blue Cross Blue Shield Study of 500,000 participants 7.1% Decrease in 1 st year Medical Spend for new HDHP members. 9.2% decrease in 3 year average Medical Trend and Risk adjustment for those new HDHP members. Positives: Drop in Inpatient and Outpatient Use Drop in Emergency Room Use Drop in Surgeries Increase in Generic Rx Fill Rate Negative: Slight drop in Physician Office Visits and Wellness 29

30 HDHPs Lead The Pack* *Pwc touchstone report

31 Redirection of Care By Transparency Hospitals Post Prices Online 1/1/2019 Kaiser Health 31

32 Redirection of Care Narrow Network 32

33 Redirection of Care by Plan Payment Reference Based Pricing Carriers ELAP HST AMP 6 Degrees 33

34 Redirect to Primary Care First More Doctor contracts are based on Pay for Value rather than Volume. A move to Accountable Care Organizations (ACOs) Primary Care (PC) is being considered the bridge from the status quo to a more efficient and effective health system. It represents 5.8% 7.7% of total health spending in U.S. Rhode Island increased PC flows to 9% from 6% over a four-year period, as a result, overall spending reduced 14%. Look for an increase in: Onsite Clinics, Primary Care Concierge 34

35 Engaging Members: Concierge Tele-Medicine 35

36 Expanding Education 36

37 Rx Solutions: Unique To The Plan Most TPAs/Carriers Drive the Process and Control the PBM* Sometimes determined by Size of Group and Funding Type Most Common Strategies Today: Formulary or Benefit Exclusions, Higher Member Cost Share, Limited or Exclusive Pharmacy Network, Prior Authorization, Quantity Limits and Step Therapy Note: The President signed several Bills to help lower Rx Costs by 2020 through: Greater Transparency, Faster to Market Generics and BioSimilar Drugs, Control of Rebates, Greater Cost Sharing for R&D with other countries. *Pwc touchstone report

38 Well-Being Management Mind, Body, Sprit = Happy, Productive Employees *Pwc touchstone report

39 Disease Management Retooling Carriers are Retooling their Disease Management Programs for Greater Engagement and Results Pwc touchstone report

40 Human Capital Management In our time of low unemployment, causing extreme competition for talent, Human Capital Management will be the next pillar Human Resource teams will encounter. Attract and Retain remains the number one focus but at what Cost and Value? Greater emphasis of ROI which means greater analytics tracking. Greater need for HRIS systems that integrate many modules: On-Boarding, Time & Attendance, PTO Tracking, Performance, Social Benefits Streamline Administration Duties 40

41 Key Takeaways Horton Group Employee Benefit Solutions 41

42 Key Takeaways The Affordable Care Act (ACA) Remains in force. All ACA Compliance Remains including Reporting Healthcare Continues to Expand due to Society s aging population. Healthcare Costs continue to rise due to Innovation, Mergers and Acquisitions of Hospitals and Providers, Rx and lack of Transparency. High Cost Claimants ($100,000 & $500,000) have soared over the past 5 years. Insurance Carriers have stabilized from the onset of ACA Public Sector Employers remain challenged by higher risk aging demographic, and richer benefit plans. 42

43 Key Takeaways Employers are reaching a tipping point and looking to take more control of healthcare costs through several strategies: Consumerism High Deductible Health Plans (HSAs), Transparency for efficient provider use Stronger controls on Rx. New Concierge services will help Communicate 24/7/365. Well Being efforts to cover Mind, Body and Spirit for early detection, health compliance to lower cost and improve productivity. Human Resources is moving into the Human Capital Management era where greater reporting and analytics will be at the forefront requiring robust integrated HRIS systems. 43

44 Questions? 44