The Kaiser Family Foundation reports 2021 insurance premium increases will be modest—averaging about 1.1%—but, with the continuing stress of the COVID-19 pandemic, there is “considerable uncertainty as to what health costs, utilization and enrollment will look like.”
To most employers, this is not news. The challenge is that the current health insurance model offers no solution. The well-worn path is to continue to shift costs to employees in the form of increased premiums and deductibles or narrower networks and restricted formularies. This won’t change the long-term trajectory, and it is having adverse effects in other areas of employee compensation. According to a study by the RAND Corporation, there is good evidence that rising healthcare costs are reducing wages.