- Tags : HR & Staffing | Group Health Insurance | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - Group Health Insurance
In the three years to 2017, group health insurance premiums have been rising at an estimated average annual rate of 1.7%. The cost of reimbursing healthcare providers for the services they render on behalf of plan participants is a primary expense for health insurance carriers, referred to as claims and benefits. The price of healthcare services has been rising, resulting in higher costs for insurers during this period. Insurers have passed these cost increases to buyers in the form of higher premiums.
Demand for health insurance has also been growing during the period. Per capita disposable income has been increasing as the labor market has improved, which has allowed a greater number of individuals to afford health insurance. Likewise, the number of employees has been growing in concert with the economy, which has compelled employers to purchase more group health insurance policies to cover these new workers. Increases in these demand drivers have been accompanied by a spike in the number of physician visits, which has led to higher utilization of healthcare services and further augmented demand for health insurance. Collectively, these factors have fostered higher demand for services, which has given insurers greater pricing power over buyers.
The introduction of the PPACA has also driven an increase in premiums. Specifically, the reform has introduced a pool of riskier individuals into the health insurance system, leading to higher costs for insurers because these individuals require a wider array of healthcare services. Thus, insurers have raised premiums to offset these growing costs. Fortunately, price volatility has been minimal due to negligible fluctuations in price drivers and robust competition among suppliers. Consequently, buyers have been able to accurately budget for their health insurance expenses. However, in light of continued growth in premiums during the three years to 2020, buyers should renew their health insurance contracts as quickly as possible to lock in premiums at lower rates.
Get more detailed informaton, including vendor statistics, RFP elements, negotiating tactics, market dynamics and more on this and hundreds of other products and services. More Info