Feel like you’re paying a lot for healthcare now?  Well, no downturn in healthcare costs is expected in 2013, but on the positive side, there is no huge upturn expected either. A 2012 survey by PricewaterhouseCoopers’ (PWC) Health Research Institute  projects a medical cost trend increase of a relatively flat 7.5 percent for 2013.  Medical cost trend is an important factor that is used to project and formulate the cost health insurance premiums for employers and consumers. 

According to PWC’s survey, this low growth in the medical cost trend will be attributed to four main factors: 

1. Medical supply and equipment costs will deflate under market pressure.
2. New methods to deliver primary care services will continue to grow in popularity.
3. Transparency of price will pressure lower costs.
4. The increase in the amount of “generic” drugs available from 2011, 2012, and 2013 after patents expire on the “branded” version of the drugs.

Does this mean that insurance premium costs wont’ be increasing?  Unfortunately not. Insurance premiums will continue to increase in the near future, just not at an acute rate.

With premium costs still on the rise, what strategies will employers implement to keep insurance costs as low as possible?  Two prominent areas of focus are: 

1. Consumer Driven Health Plans
2. Wellness Programs

A recent post by BenefitsPro.com  states that the median amount an employee can earn from participating in wellness programs and/or adopting a healthy lifestyle will go up from $300 in 2012 to $450 in 2013. That’s a 50 percent increase!  Experts believe that wellness programs with financial incentives are  a key way to motivate employees to take charge of their health and drive down costs. It’s a win-win situation both for the employee and the employer, as healthier employees tend to be more productive with fewer work absences.  

Meanwhile, COBRA administration outsourcing continues to gain popularity as insurance brokers and employers struggle to keep up with the changing requirements of healthcare reform. When turnover levels are high, COBRA administration becomes more complex and time consuming, and that certainly has been the case for many employers who have managed early retirement and layoff situations over the past few years.

Many employers have discovered that outsourcing COBRA is far more cost effective than managing it in house. In addition to being cost-effective, outsourcing offers the benefits of secure, reliable documentation of timely COBRA notices, which provides immeasurable value in the event of a COBRA dispute or audit.

In summary, 2013 should bring relatively stable healthcare costs, new methods of delivery for medicine, equipment and primary care, and an increased focus on wellness. It also may be the perfect time to outsource COBRA administration to increase HR efficiency and compliance.

By evaluating all facets of healthcare, employers can find opportunities for cost control and improvement in 2013 and beyond.

Could you benefit from COBRA outsourcing? To learn more, download our free report, “In Search of ROO.”