Feb 08, 2024
The landscape of employer-based health care is continually evolving, influenced by a myriad of factors ranging from regulatory changes to economic fluctuations. As we delve into 2024, experts foresee a turbulent yet transformative year for health insurance. In the wake of the COVID-19 pandemic and amidst ongoing regulatory upheaval, the business of health insurance faces both challenges and opportunities.
As problem solvers for your clients, this sweeping look at the highlights of employer-based health care trends in 2024 can be quite useful, along with illustrative examples.
Healthcare Dive’s Rebecca Pifer offered this perspective:
- Only 7% of health plan executives view 2024 positively after being hammered by the coronavirus pandemic, regulatory turbulence and rising cost pressures, according to a Deloitte survey.
- Costs are spiking, and health insurers remain uncertain how the lingering effects of COVID-19 will impact care utilization.
- Meanwhile, 2024 is a presidential election year. That’s adding more political uncertainty into the picture as Washington hammers payers over claims denials and the business practices of pharmacy benefit units.
Kaiser Family Foundation’s Gary Claxton and Matthew Rae did a deep dive on employer-sponsored health insurance (ESI). Below is an explanation of their findings. The analysis of part of the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.
- Employer-sponsored health insurance (ESI) is the largest source of health coverage for non-elderly people, covering 60.4% of this population in March 2023 (about 164.7 million people). Not all workers have access to ESI, however; some workers are in jobs where the employer does not offer coverage (usually smaller employers) and some workers are not eligible for the coverage offered at their job. Additionally, some workers do not enroll in the ESI they are offered.
- Three-in-four workers ages 18-64 years are eligible for ESI at their job. About four in five (80.8%) adult non-elderly workers worked for an employer that offered ESI to at least some employees, a share that has been consistent over recent years.
- The share of non-elderly adults with ESI remained stable in recent years.
- The share of workers eligible for ESI at their job rose modestly over period, from 73.4% in March 2019 to 75.3% in March 2023.
- Most eligible workers who do not take up ESI offered at work cite other coverage (66.9%) and cost (28.0%) as the reason.
Overview of 2024 trends for brokers
Rise in the Uninsured Rate: Factors such as Medicaid redeterminations are anticipated to contribute to a surge in the number of uninsured Americans.
Example: Individuals undergoing Medicaid redeterminations may find themselves without coverage options, leading to an increase in the uninsured rate as they struggle to access necessary healthcare services.
Increasing Vigilance Around Costs: Healthcare costs are expected to soar, compelling employers to prioritize mental health services and advocate for integrated benefit platforms.
Example: Employers are proactively seeking solutions to address mental health needs amid escalating healthcare costs by investing in virtual care providers and promoting mental health awareness initiatives in the workplace.
GLP-1 Coverage Expansion: There's a projected expansion in insurance coverage for GLP-1 drugs (glucagon-like peptide-1 drugs), renowned for their efficacy in diabetes treatment and weight management.
Example: Private payers are contemplating extending coverage for GLP-1 drugs for weight loss, potentially linking access to these medications with participation in behavioral management programs to optimize outcomes and control costs. According to a November survey by the International Foundation of Employee Benefit Plans, while 76% of employers provide GLP-1 drug coverage for diabetes, just 27% provide coverage for weight loss. Yet, 13% are considering adding coverage for weight loss.
The Mark Cuban effect: Introduction of Transparent Options in Pharmacy Benefit Management (PBM): Major PBMs are responding to client demands by introducing transparent and cost-effective options, aiming to enhance trust and satisfaction among stakeholders.
Example: PBMs are rolling out outcomes-based pricing models and increased transparency initiatives, offering clients greater visibility into drug pricing and rebates to foster stronger partnerships and mitigate concerns over opaque pricing practices. UnitedHealth’s Optum Rx, Cigna’s Express Scripts and CVS Caremark — which together control 80% of prescriptions in the U.S. — have all recently launched new programs, partnerships or models they say are more affordable and transparent to meet the demand.
Continued Mergers and Acquisitions (M&A): Health insurers are expected to pursue mergers and acquisitions actively, particularly focusing on entities with a robust presence in Medicare Advantage. Consolidation may also pick up in 2024, a trend that industry watchers have been eyeing for months as funding ticked down and potentially pushed startups toward dealmaking. Digital therapeutics, mental health providers and weight loss companies could be attractive acquisition targets, experts said.
Example: Companies like UnitedHealth and Cigna are exploring strategic M&A opportunities to bolster their networks of physical care sites and expand their market share, positioning themselves for sustained growth and competitiveness in the evolving healthcare landscape. Companies like UnitedHealth, CVS and Humana will continue building out networks of physical care sites in 2024. Optum — which employs or is affiliated with around one-tenth of all doctors in the U.S. — is already eyeing M&A.
Continued Growth of Medicare Advantage (MA): Despite regulatory challenges, the popularity of Medicare Advantage plans is anticipated to surge among seniors, driving significant growth in this sector.
Example: Major insurers are expanding the geographic reach of their Medicare Advantage plans to attract more enrollees, demonstrating a commitment to navigating regulatory changes and ensuring sustainable growth.
Building the infrastructure for AI in healthcare: Buzz about the potential for AI in healthcare reached a fever pitch in 2023, especially for generative AI technology, which can create new content like text or images.
Example: Tech giants like Google, Microsoft, Oracle and Amazon announced new products last year aimed at tackling operational tasks and reducing administrative burdens.
In conclusion, 2024 heralds a period of significant transformation and adaptation for the employer-based health insurance sector. Despite the challenges posed by regulatory uncertainties and escalating costs, opportunities abound for innovation and strategic partnerships to drive sustainable growth and improve access to quality healthcare services.
By staying attuned to emerging trends and proactively addressing the evolving needs of consumers, employers, and regulatory bodies, brokers can navigate the complexities of the current landscape and emerge stronger and more resilient in the years ahead.
Look to your Amwins Connect Regional Sales Manager to support you in 2024. Our consultative/advisory approach to helping you find the right solution for your clients ensures you the greatest success.
