Employer-sponsored insurance: Trends for payers to watch

Health insurance, pen and stethoscope
Like healthcare policy, the employer-sponsored coverage business is also facing change. (Photo credit: Getty/Minerva Studio)
Ian Morrison
Ian Morrison

As they grapple with potential changes on the horizon for healthcare policy, payers should keep an eye on several notable trends in the employer-sponsored coverage business.

Employers are increasingly working directly with providers to offer better value to employees and reduce what they spend on benefits, healthcare futurist Ian Morrison, Ph.D., wrote in a column for Hospitals & Health Networks. Large employers are working to make such partnerships, according to Morrison, because they can't indefinitely shift the costs to employees.

This includes doubling down on offering narrow networks, creating direct contracts with accountable care organizations and being more highly involved in case management. It may also mean leaving behind certain insurance carriers and pharmacy benefits managers as costs rise. David Lansky, CEO of the Pacific Business Group on Health, said such moves are a sign of how "fed up" employers are with increasing costs.

Morrison noted that other trends could significantly impact insurer-sponsored plans in the future, including:

  • Rising drug costs: This reverberates across all stakeholders in the health industry, so it shouldn't come as a surprise that employers have their eye on the situation, too, said Morrison. 
  • The chance that millions could lose insurance: If an ACA repeal goes through as planned, millions of newly uninsured people would be getting uncompensated care and providers would likely shift revenue cut from Medicaid to employers, according to Morrison.
  • A possible exit from offering health coverage altogether: Assuming payers and the industry as a whole don't re-evaluate the current system, Morrison said that they should expect more employers to reduce or eliminate their contributions, especially if changing healthcare policies makes that process easier.

Thus far, research has found that the Affordable Care Act has had minimal impact on employer-sponsored health plans. A number of employers, however, are embracing private exchanges to reduce costs.