Five Strategies to Reduce Health Benefits Costs in 2022
by Benjie Bates
For the past two decades , health costs have increased each year . This happens for a variety of reasons , such as inflation or , say , a global pandemic . With that in mind , employers can bank on prices going up in 2022 .
According to a PricewaterhouseCoopers ( PwC ) report , medical costs are projected to increase 6.5 % in 2022 . This is about average for the past decade ; although , it is slightly lower than the 7 % increase projected this year ( as more spending goes toward the COVID-19 pandemic ).
Yet , 6.5 % is still a considerable increase , especially when so many budgets have been reallocated or slashed due to the pandemic . That ’ s why employers must think both strategically and creatively about how they can lower their health benefits expenses in 2022 .
This article includes five ways to help reduce spending without compromising benefits quality . 1 . Control Drug Spending
Drug prices are rising faster than any other medical service or commodity . Prices are now 33 % higher than they were in 2014 , according to GoodRx . This is a significant problem during inpatient procedures , during which individuals aren ’ t usually given an option to select a generic medication — patients rarely know what drugs they ’ re given until after the fact . Even in routine prescription scenarios , employees may be prescribed name-brand medications simply due to physician preference .
Employers can educate employees on the price differences between name-brand and generic medications . Doing so can help employees understand that they can save money while still receiving the same quality treatment .
Additionally , employers may consider introducing varying levels of prescription drug coverage . For instance , fully covering generic prescriptions or drugs used for chronic conditions . For higher levels ( e . g ., specialty drugs ), employers may cover less of the costs . Ultimately , employers will need to determine the appropriate coverage levels for their unique workplaces . 2 . Encourage Active Benefits Participation
Beyond drug spending , employers can help limit overall health costs by making employees active participants in their health care . This means encouraging employees to improve their health literacy , research treatments and price shop .
Price shopping , in particular , should be easier in 2022 , given the new hospital price transparency rule that took effect on Jan . 1 , 2021 . Employees will now be able to see specific prices for procedures and other services . This incentivizes employees to educate themselves before making costly health decisions . 3 . Offer Savings Accounts with Carryovers
Health plans with savings components are becoming more popular each year . That ’ s because these tax-advantaged savings accounts empower employees to control their own spending and improve their health literacy . The accounts include health savings accounts ( HSAs ), flexible spending accounts ( FSAs ) and others .
Many accounts allow for fund carryover year to year or allow employers to add that option onto their plan designs . Allowing carryover encourages employees to contribute more funds since they ’ re no longer “ use it or lose it .” Since many employers match contributions up to a limit , more money added to these accounts means greater tax savings for everyone . 4 . Embrace Virtual Health Options
One major takeaway from the COVID-19 pandemic has been that virtual solutions can offer high-quality outcomes . This is so true that many companies are allowing employees to work remotely permanently . Virtual health options are no exception to this trend . There are countless telehealth services available these days .
Individuals can connect with health professionals in just a few
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