Long Island Business News recently featured Health & Benefits Partner Kevin Quinn and Vice President of Compliance Jill Bergman, CEBS® in a cover story entitled “2018 Destination Unknown”. The article, which cited Kevin Quinn and Jill Bergman as leaders of the Healthcare Consulting industry, discussed the outlook of the Healthcare industry in 2018 and what employers and employees alike can expect in the coming year. The forecast was given based on the reforms and transformations to healthcare in 2017 and the increasing number of employers enrolling in Focused Average Cost Tracking (F.A.C.T.). Both Kevin and Jill noted that F.A.C.T. is designed to set price limits for certain medical procedures and/or limits the cost the plan will pay for hospitals/outpatient facilities, making it a widely-used alternative to traditional healthcare models.

2018 Destination Unknown: Healthcare:

The healthcare forecast for 2018 is partly sunny or partly cloudy, depending on your outlook. 2017 was a tumultuous year for healthcare.  Efforts to “repeal and replace” Obamacare fell apart, proposed healthcare mergers (Anthem/CIGNA and Aetna/Humana) never happened, Obamacare premiums increased again for 2018 and health insurers exited the Obamacare marketplaces nationwide including here on Long Island, which saw Health Republic and Northwell’s CareConnect disappear.  President Trump declared the opioid crisis a national emergency and the price tag will be high to deal with this epidemic. So what’s on the healthcare horizon for 2018? Healthcare costs will continue to increase.

Specialty drugs and other medical advances will continue to put upward pressure on national, employer and individual medical expenditures.  The monthly premium for a typical “gold-level” (80%) plan is currently about $900 and $2,500 for single and family coverage, respectively. More individuals will be covered under high deductible health plans (HDHP). Employers will continue to incentivize employees to enroll in an HDHP benefit option while other employers may consider an HDHP as the only healthcare benefit they will offer.  To remain competitive, companies will continue to offer healthcare benefits to employees, but are seeking creative ways to control costs.

Companies with 100 to 500 employees that typically would purchase insurance policies with known monthly premiums are now considering self-funding their medical plans and purchasing stop-loss insurance to protect against high claim liability. Other businesses are beginning to explore F.A.C.T. (Focused Average Cost Tracking), a new reference-based pricing alternative to traditional healthcare models. F.A.C.T. generally sets price limits for certain medical procedures and/or limits the cost the plan will pay for hospital and outpatient facilities.