Variances in health care costs for fully insured employers
Health care costs vary across the country — and that variation can make an impact on the costs of employers offering fully insured plans.
For employers with fully insured health plans, navigating the complexities of health care costs can be a daunting task. However, understanding state-by-state variations and implementing strategic cost-saving measures can significantly alleviate financial burdens while improving employee health outcomes.
An analysis of UnitedHealthcare data1 revealed that the average per member, per month (PMPM) cost nationwide among fully insured employers is $407. However, the cost differential between the least and most expensive states is $355 — from an average PMPM cost of $282 in Alabama to $637 in New Hampshire. This significant variation underscores the importance of regional considerations in plan design and cost management.
Cost-saving strategies for employers with fully insured plans
Evaluate plan design options
Plans that clarify care costs upfront, prioritize quality care and/or require employees to select a primary care provider (PCP) are designed to help employees make more informed decisions about their care, which may lead to lower costs.
Weigh different network choices
While broad networks may offer more choice, focused and/or tiered networks work to help control costs with lower negotiated rates. Some are organized around value-based care arrangements, where providers and health systems are compensated based on quality of care rather than quantity of services rendered.
Understand population-specific challenges
Certain employees may experience poorer health outcomes and higher health costs simply based on where they live. Employers can look at health data from sources like America’s Health Rankings to help determine which benefits and programs to promote or add to address their population’s specific challenges.
Educate employees and promote preventive care
Helping employees understand the financial impact of their health care choices may help them make more informed decisions (e.g., choosing urgent care instead of an ER). And routine preventive care may help employees catch conditions sooner, when they are typically less costly to treat.
Remind employees about their benefits
Providing regular communications about benefits and programs available to them at little or no additional cost (e.g., advocacy, routine preventive care, apps for low-severity behavioral health support) may help increase employee engagement with their health plan.
Encourage participation in wellness programs
Incentive programs like UnitedHealthcare Rewards that reward participants for completing activities, such as walking, cycling, tracking sleep and more, are designed to help employees get and stay healthier, which may also help lower their out-of-pocket costs.
Getting real about rural care
Unlike their colleagues in urban and suburban areas, employees living in rural America may face disparities like provider shortages, long distances to travel for care and a higher prevalence of chronic conditions. For instance, rural areas experience a 23% higher mortality rate.2 Employers can do their part to help address them by offering a health plan with access to low- or no-cost virtual care, clinical programs addressing employees’ top chronic conditions and wellness programs focused on obesity, tobacco use or other underlying causes of costly conditions.
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