The fall semester has begun, and the celebration of Reunion & Homecoming and Family Weekend signals the Open Enrollment period for faculty and staff to review their medical plans. The growing cost of health-care benefits remains a concern for Rensselaer and other employers.
The American Health Policy Institute notes that health-care expenses are concentrated among a relatively small percentage of high-need individuals, those whose medical cost is $50,000 or more in a year. In addition, drug prices have risen an average of nearly 10 percent over the 12-month period ending in May 2016—a time when the overall inflation rate was just 1 percent in the U.S.
According to data cited by the Wall Street Journal, while food and alcohol prices have risen 2.8 percent, and clothing and accessories are up 5.7 percent, pharmaceutical prices have increased 9.8 percent in the past year. Spending on prescription drugs is now growing at a faster rate than spending on any other health-care item or service. For example, in 2016, more than half a million Americans took at least $50,000 worth of prescription drugs each year. Furthermore, drug prices are rising at a rate of 12.7 percent for 2016 and projected to rise 13.9 percent for 2017.
The average annual cost of an employer family plan rose 4.2 percent, to $17,545, from $16,834 last year, according to the annual survey of employers performed by the nonprofit Kaiser Family Foundation along with the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association. The health-care cost, in the United States, is close to $3 trillion per year or about 18 percent of our gross domestic product (GDP).
To guard against rising medical and pharmacy costs that may impact the cost of the Rensselaer Health Plan, the Division of Human Resources has implemented several comprehensive strategies that have proven to be effective. Some strategies include, but are not limited to, implementing a three-tiered prescription program; activating a prescription drug coupon and rebate program; negotiating lower prices and payment arrangements with vendors; and implementing health coaches and wellness initiatives.
When we compare the Rensselaer Health Plans to other employers’ plans, using the Kaiser Survey, the outcomes demonstrate the success of our strategic planning efforts and proactive initiatives year after year.
To guard against rising medical and pharmacy costs, implementing several comprehensive strategies have proven to be effective: implementing a three-tiered prescription program; activating a prescription drug coupon and rebate program; negotiating lower prices and payment arrangements with vendors; and implementing health coaches and wellness initiatives.
Over the past decade, the annual health-care deductible for an individual has more than tripled from $300 to $1,554. For 2016, the Rensselaer Health Plan has a $250 annual individual deductible; and the HMO Plan has a $0 annual deductible. This year, the average employer cost for family coverage is $18,648 a year with an employee cost-sharing over 28 percent or $5,448. For Rensselaer, the employee cost-share for family coverage is 23 percent with an annual spending of either $3,374 or $4,670 per year depending on the elected plan. This means our faculty and staff pay from 14 percent to 38 percent less for family coverage than the average cost stated for the average employer cost-share for family coverage based on the Kaiser Survey.
The 2017 Open Enrollment Period will begin on November 4, 2016, and conclude on November 21, 2016. In the next few weeks, we will share updates regarding new changes to the Rensselaer health and welfare program as we strive to continue offering a comprehensive, cost-effective, and valued benefits program to employees at Rensselaer.
Curtis Powell, SPHR
Vice President for Human Resources