Health Costs Hit $15K Per Worker As Employers Look To Amazon For Help
Employer health costs are nearing $15,000 per worker as corporate America looks to “disruptors” like Amazon for help, a new survey of the nation’s largest employers indicates.
The National Business Group on Health said Tuesday per employee costs are projected to increase 5% to $14,800 in 2019 compared to this year’s estimated $14,099 per-employee this year. Employers generally cover about 70% of the total employer-paid premium which means employees’ share will be 30% or nearly $4,500 next year, NBGH’s 2019 large employer health care strategy and plan design survey indicates.
The continuing rise in health costs more than two times the rate of general inflation is playing like a broken record and frustrating employers so much they are increasingly looking outside the traditional healthcare industry for help. That leaves an opening for the likes of Amazon and the technology community for help.
“Seven in 10 employers believe new market entrants from outside the healthcare industry are needed to disrupt healthcare in a positive way,” NBGH CEO Brian Marcotte said. Though NBGH’s survey didn’t specify Amazon by name, Marcotte said “disruptors include innovators from Silicon Valley and elsewhere, and employer coalitions.”
Earlier this year, Jeff Bezos’ Amazon, Warren Buffett’s Berkshire Hathaway and JPMorgan Chase & Company announced they want to create an “independent company” to improve healthcare and lower costs for their more than one million employees. It’s unclear what the three corporate titans may come up with and how it will work for their employees, but the NBGH survey noted other employers are looking increasingly at a variety of things. Here are some examples:
Marcotte said employers will no longer be able to continue to “rely on traditional cost sharing techniques to manage costs.”
“A growing number of employers are taking an activist role in shaking up how care is delivered and paid for,” Marcotte added. “Health care cost increases continue to outpace workers’ earnings and increases in inflation, making this trend unaffordable and unsustainable over the long term.”