Large U.S. business owners will be required to pay higher prices in order to provide health insurance coverage to their employees, a new study shows.
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According to an annual survey by the National Business Group on Health, the cumulative cost of providing medical and pharmacy benefits is expected to rise 5% in 2018 – up for the fifth consecutive year. Large U.S. companies are expected to have paid about $13,482 per employee in 2017 and that figure is forecast to rise to $14,156 next year. While employers will cover 70% of those costs, according to the survey employees could be responsible for about 30% – or $4,400 each in 2018.
As employers seek to temper rising prices, the National Business Group on Health survey identified specialty pharmacy as a primary driver of surging costs, with 26% of businesses listing it as their main concern. Increasing pharmacy costs were followed by high cost claimants and specific diseases or conditions.
Where other cost control mechanisms are concerned, companies have increasingly adopted new strategies to make health care more affordable, including telehealth services, Centers of Excellence and Accountable Care Organizations.
At the end of last month a Republican-led effort to repeal and replace the Affordable Care Act failed to gain the necessary traction in order to pass the Senate. Among the items that GOP lawmakers had prioritized throughout reform negotiations included the removal of some ObamaCare taxes as well as the individual and employer mandates — the latter of which could have exempted certain small businesses from being required to provide coverage to employees.
While Senate Majority Leader Mitch McConnell (R-Ky.) said over the weekend that repealing and replacing ObamaCare could still happen, time is running out as the mandate to pass health care reform through the fast-track process known as reconciliation comes to an end as soon as the budget for the new fiscal year – which begins in October – is passed. Next year, Congress is expected to shift its reconciliation directive to tax reform.