We’re thrilled that you’ve chosen CaliforniaChoice for your employee benefits! By having us on board, you’re showing your dedication to your employees’ health and wellness.
As you know, CaliforniaChoice offers you the freedom to decide how much to contribute to your employees’ insurance premiums, while giving your team a wide array of choices. With dozens of HMO, PPO, EPO, and HSA options from top health plans, your employees have the power to select the coverage that best fits their needs. They have the flexibility to choose from recognized plans, including:
- Anthem Blue Cross
- Cigna + Oscar
- Health Net
- Kaiser Permanente
- Sharp Health Plan
- Sutter Health Plus
- UnitedHealthcare
- Western Health Advantage
Now that we’re moving through the first quarter of 2024, you may be wondering what you can expect in the months ahead for employee benefits. Here are three things you’re likely to encounter:
Escalating Health Insurance Premiums
Several studies by insurance analysts at Aon, Mercer, and Willis Towers Watson, are forecasting somewhat higher health insurance premiums in this year. For more than a decade, annual increases have been below four percent. This year customers could see a bigger jump. Estimates range from less than five to nearly nine percent.
The percentage increase your group could experience depends on several factors:
- Coverage type (HMO, PPO, EPO, or HSA – or some combination of plan types)
- Affordable Care Act (ACA) metal tiers: Bronze, Silver, Gold, Platinum
- Carrier/health plan
- Region (health plans implement premium adjustments geographically, so not all plans in Northern California, Central California, and Southern California may be equally affected by a change)
The Covered California Public Exchange said last year that its average health plan rate is up 9.6% for 2024. The participating carrier rate bumps range from a low average of less than one percent to a high of nearly 16%. The increases are attributed to medical inflation, labor shortages, and related wage increases, higher demand for services, and increased medication costs – especially expensive weight loss drugs and cell and gene therapies.
Consolidation of Health Care Players
The number of integrations and consolidations in the health care industry has been down in recent years. It hit a three-year low during Q3 2023. However, deals were made last year that are worth noting:
- Amazon’s acquisition of One Medical (closed February 2023); the purchase expands upon Amazon’s other health care services such as Amazon Clinic, RxPass, and Amazon Pharmacy
- CVS Health’s acquisition of Signify Health (completed March 2023)
- CVS Health’s purchase of Oak Street Health (completed May 2023)
- The Kaiser Permanente and Geisinger affiliation/creation of Risant Health (April 2023); Kaiser Permanente says it expects to invest $5 billion in Risant during the next five years
- UnitedHealth Group Optum’s merger with Amedisys (announced in June 2023; closure still pending approval)
Layoffs in the health sector are climbing (as in other industries). In 2023, U.S. health care job cuts exceeded 50,000. That was up 90% from 2022. A Tebra survey found nearly one-third of American health care workers witnessed layoffs at their employer in 2023. Already in 2024, Amazon, Aera Therapeutics, Blue Shield of California, Humana, Kaiser Permanente, Pfizer, Walgreens, and others have cut thousands of jobs. Rite Aid is shuttering 55 additional stores nationwide. CVS Health is closing MinuteClinic locations in Southern California. More could follow as consolidation continues.
Rising Prescription Drug Costs
Multiple sources have reported on drugmakers’ price increases on hundreds of drugs in 2024 – and it is still just Q1. Manufacturers making changes include Pfizer, Sanofi, and Takeda. Pfizer stood out with increases on more than a quarter of all affected medicines. Takeda’s Baxalta had increases in January on 53 drugs, followed by UCB Pharma with increases on 40 products.
One legal challenge to the Inflation Reduction Act (IRA) has already been rejected by a federal judge. Under the IRA signed into law by President Biden in August 2022, the U.S. Department of Health and Human Services (HHS) was given the authority to negotiate drug prices for those enrolled in Medicare. (Negotiated prices are effective starting in 2026.) The first 10 drugs to be included in price negotiation were announced in October. Industry groups and drugmakers responded with multiple lawsuits to stop the price negotiation program. However, the rejection of the PhRMA suit bodes well for the federal push to control drug prices.
Talk With Your Broker
When your group’s CaliforniaChoice renewal approaches, you can expect to hear from your broker. At renewal, you’ll have the opportunity to adjust your contribution to employees’ premiums or add new coverage options for employees. Talk with your broker about any changes you and your employees want to make for the upcoming year. If you don’t hear from your broker, you can also reach out to the CaliforniaChoice Customer Service Team. We are available by phone at (800) 558-8003, or via email at CustomerService@CalChoice.com.
Thanks, again, for choosing CaliforniaChoice.