Hickock Boardman Benefits

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The Five Healthcare Trends from the VT Benefits Survey

Last fall, our family cat, Pip, took off.  We’d recently moved to a new home, about a mile from our old one and Pip apparently wasn’t having it.  Days went by, then a week, then several weeks, and still there was no sign of the guy. Our new home was in a more wooded area and while Pip was one of those savvy outdoor cats, we feared that he’d been gobbled up by some creature. Our family was devastated, of course, and Pip’s name stop being uttered around the household.

Then one day we got a call from an old neighbor.  Pip had reappeared at our old home.  After three months.  He’d apparently been back for a couple of days and was renamed Fred by the new owner and was eating dog food meant for the owner’s Great Dane. 

When we picked Pip (Fred) up, he was a shell of his former self.  He was beyond thin; burrs littered his fur and he really looked awful.  Mangy was an understatement.  Once he was back with us, we had to have him shaved (don’t ask) and for the next few weeks Pip didn’t dare venture outside.  He just walked his thin body slowly from room to room and slept all the time.  He clearly was exhausted by the experience. 

So, what does all this have to do with the VT Benefits Survey and trends?  Well, I feel like most employers are like Pip when it comes to dealing with healthcare benefits.  They receive their renewal and then go on a wild adventure for three months trying to get back to their old pricing and benefits.  But, as Thomas Wofe wrote, you can’t go home again. 

Yet the adventure begins all over each year for employers when the renewal arrives and plan designs are altered, coverage is shopped and on the other side of the experience, employers are thinner (usually from having to spend more), mangier (from the turbulence of the experience) and begin calling themselves Fred and eating things they don’t want to (plan changes, carrier changes).  It’s a trend that’s been in place for many years now and I get the sense, from talking with many employers, that they are really tired of the annual Pip journey.

Why are they tired?  (And here’s where the actual survey trends come in.)

  1. Average healthcare premiums in Vermont increased in by 7% in 2019.  For the last six years the average increase has been at least 7%.  This is a bad trend.  Since 2001 when we started conducting our survey premiums for Vermont employers, on average, have increased by 137% in total.  Over the same time, general inflation increased 36%.  That’s enough to make any employer mangy.
  2. More employers are moving to self-funding arrangements.  And while self-insurance is a smart move for many employers for many reasons, the impact of expensive specialty drugs and inpatient hospital claims take some of the benefit of being self-insured away.  That said, self-funding is a step in the right direction as it creates more opportunities for innovation.
  3. Deductibles are