Facing the Future: Health Insurance and Health Care 2024 Trends
Health insurance and health care industry analysts don’t all agree. But there is some consensus about a few “hot topics” likely to impact brokers and your clients in 2024. Let’s take a look at five.
As we reported last fall, U.S. employers are expected to see a larger increase in premiums for employees’ health insurance in 2024 than in recent years. Estimates by Mercer, Aon, Willis Towers Watson, and others range from increases of four percent to more than 10 percent. The cost increases are being attributed to medical inflation (up less than four percent last year), higher wages, greater demand for expensive weight loss medications, and wider availability of higher-priced cell and gene therapies.
Rising Health Insurance Premiums
Increased use of mental health and substance abuse disorder treatments could also drive higher premiums. The premium adjustments are expected to vary by carrier and region as well as the type of coverage selected (e.g., PPO, HMO, EPO, etc.). An analysis by ValuePenguin.com found the percentage change for the average cost of health insurance in California for 2024 is 11% higher than in 2023.
Reuters reported in late December that drugmakers are set to raise prices on at least 500 drugs this month alone. Manufacturers on the list include Pfizer, Sanofi, and Takeda. Pfizer stood out with increases on more than a quarter of all affected medicines. The company is boosting prices on 124 doses or formulations, as well as another 22 treatments from its sterile injectables arm, Hospira. Takeda’s Baxalta had increases in January on 53 drugs, followed by UCB Pharma with increases on 40 products. Price increases from other firms could come before the end of the month.
Increasing Rx Costs
In other Rx news, analysts are monitoring the pharmacy industry’s legal battles in response to Medicare’s new price negotiation program. The program was among the provisions in the 2022 Inflation Reduction Act. In August 2023, the U.S. Department of Health and Human Services (HHS) announced the first group of 10 drugs to be included in price negotiation. Drugmakers and industry groups have filed multiple lawsuits to stop the program. Ultimately, one or more cases will likely wind up in the U.S. Supreme Court. The fear for some in the drug industry is that changes to pricing for Medicare could impact pricing for commercial insurance plans as well. Time will tell.
HHS announced that for business processed through December 23, 2023, more than 20 million people enrolled in Affordable Care Act (ACA) marketplace coverage for 2024. Enrollment ends for most public exchanges on January 15, although Covered California enrollment continues through January 31. This new record enrollment includes more than nearly four million people new to the marketplaces as well as 16.6 million (82% of the total) who had coverage during 2023.
Greater Participation in ACA Exchanges
Covered California said in December that 2024 exchange enrollment was up 18% over the same period in 2023. While California enrollment is ongoing through the end of January, thus far more than 1.73 million enrollees have signed up for 2024. Nevada Health Link enrollment for 2024 is also up, although final figures are pending.
Health insurer, hospital, and health system merger and acquisition activity declined during the COVID-19 pandemic, but it is rebounding in a significant way. While a few joint ventures or integration plans have been scrapped, others are on track or recently closed. One deal affecting a major California player is the acquisition by Kaiser Permanente of Geisinger Health Plan of Pennsylvania through a separate nonprofit called Risant Health. Kaiser Permanente says it expects to invest $5 billion in Risant during the next five years – adding as many as six new nonprofit health systems.
Continuing Consolidation of Players
One deal no longer planned in Northern California involves Tenet Healthcare. After the Federal Trade Commission (FTC) announced legal action, the planned sale of San Ramon Regional Medical Center was scrubbed in December. The FTC opposed the consolidation because it said the acquisition by John Muir Health would drive up costs for services and reduce competition in the region.
After a few missteps in recent years, Amazon may be back on track with its expansion into health care services. It shut down Amazon Care in late 2022 but made some steps forward in 2023. It acquired One Medical in Q1 2023 and announced in November a discount for Amazon Prime members who want to use One Medical for primary care. This service is in addition to the RxPass service that offers Prime members the opportunity to have prescriptions filled for one low monthly price. More services could be added by Amazon in the months and years to come.
KFF (formerly the Kaiser Family Foundation) said in December 2023 that voters want to hear from political candidates about different issues. Health care ranks second with 80% of those surveyed saying it is “very important” to discuss health care on the campaign trail. Specific issues of interest are the high costs (including deductibles, prescription drugs, and long-term care), treatment of chronic health conditions, health care debt, and access to birth control and abortion.
Potential Impact of Election
One long-standing issue for the Republican Party has been the ACA. However, Fierce Healthcare reported in December that polling by the Partnership for America’s Health Care Future found the ACA has become a back-burner issue for many. However, former President Trump has resurrected the debate on the ACA’s future.
A highly divisive issue is abortion. Gallup found in July that most Americans believe abortion should be legal (at least to some degree). A majority does not support the Supreme Court overturning Roe v. Wade. However, former President Trump has bragged about his role in getting the case overturned. During his presidency, Trump appointed three conservative justices to the high court. The issue could influence federal races in California, Nevada, and across the country.
KFF’s recent Health Tracking Poll found inflation, the rising cost of household goods, gun violence, the future of Medicare and Medicaid, and immigration are also of concern for voters. How each could play into primary and general elections this year remains to be seen.
You can depend on Word & Brown to continue to monitor what is happening in health care and its potential affect on you and those you serve. Be sure to check out our monthly blogs, newsletter, and Newsroom posts to help you stay on top of carrier, compliance, technology, and industry news. If you don’t already subscribe, consider signing up for the John & Rusty Report, a compilation of news of possible interest to health insurance brokers.
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