Health care is constantly evolving and innovating — a fact that can either overwhelm or energize small business owners. Let’s take a look at four health care trends that have marked 2019.
1. Value-Based Care Is Starting to Replace the Fee-for-Service Model
While health care isn’t due to get cheaper overall, the transition from fee-for-service payment models to value-based care may allow business owners and their employees to find cost-effective solutions for getting care. There are several different approaches to value-based care, but they all center on the idea that health care providers should be paid based on the overall quality, efficiency and outcome of their care as opposed to being paid for each separate service that they perform.
With the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services instigated the push toward value-based care for Medicare. Private insurers followed suit. Almost two-thirds of health care payments are now value-based instead of fee-for-service.
2. Telemedicine Is Gaining Popularity
Like value-based care, the use of telemedicine has skyrocketed over the past few years, and it shows no signs of slowing down. In one survey, health care provider executives said that telemedicine is the technology they expect to have the biggest impact in the near future.
Meanwhile, SHRM found that over half of employers made providing more virtual care options to employees their top health care priority in 2019.
3. Employers Are Offering More CDHPs — But Not Alone
Consumer-driven health plans (CDHPs) are entering the spotlight in American workplaces. These plans pair a high-deductible payment model with a pretax account — funded by the employer, employee or both — that employees can use to pay for out-of-pocket medical costs. Health savings accounts (HSAs) first became available in 2004, and enrollment in HSA-qualified health plans has grown steadily every year since.
Enrollment in CDHPs is expected to continue to increase. Plans with higher deductibles help employers keep premiums at a manageable level, and employees are becoming more aware of the triple tax advantage of HSAs. Millennials — the largest segment of the U.S. labor force — are increasingly opting for HSA-qualified health plans.
But while the popularity of CDHPs continues to grow, the number of employers offering only a CDHP actually decreased from 39% to 30% in 2019, according to SHRM. This is partly because the ACA’s so-called Cadillac tax on high-cost plans (which employers can avoid by offering lower-cost plans like CDHPs) has been delayed again, until 2022. So, for the time being, employers don’t need to worry about facing a steep excise tax on high-cost plans and are comfortable adding those plans back to their suite of offerings for employees.
4. Technology Is Driving Employer Health and Benefits Initiatives
Which aspect of health, wellness or insurance management do you or your employees need the most help with? There’s probably an app for that. Brokers and insurers rely more and more on apps to make it easier for employers and employees to manage their enrollment and coverage.
Effectively communicating benefits options to employees before and during open enrollment is a perpetual challenge for employers, but technology is making it easier. After employees make their plan selections for the year, a plethora of apps are available to help them home in on how they can lead healthier lives.
It’s impossible to predict the exact future trends in health care for 2020, but these four 2019 health care trends are sure to be guiding forces for everyone involved, from insurers and providers to employers and their workforces.
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This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.