Employer-health-plan costs increased at a faster rate in Minnesota last year than across the country, according to a new survey, with employers saying they hope new programs and competition will help put a lid on future cost jumps.
Employer health costs rising faster in Minnesota
Most employers outside of the state are seeing increases at a lesser rate.
May 7, 2018 at 11:56PM
The survey from the Bloomington-based Minnesota Health Action Group found that employer-health-plan costs in Minnesota increased by 5.7 percent, a faster rate of increase than the national average of 4.3 percent in 2017.
National insurers Aetna and UnitedHealthcare have announced plans to expand their offerings for Minnesota employer plans over the next year or so, and the survey found that employers are optimistic the competition could help.
"Many of the initiatives that [employers] have going are to address this high rate of cost increase," said Deb Krause, vice president with the Minnesota Health Action Group. "It's not that they're doing one thing, because there's not really a silver bullet. ... They are doing a variety of different tactics that address what they're seeing in their data as well as their culture and overall goals and strategies."
Costs would have increased at a faster rate were it not for changes adopted by employers to control costs. Employers were able to shield workers from the full increase through a variety of strategies, Krause said, such as changing the amount they contribute for health coverage, tweaking benefits or getting better deals from vendors.
The rate of increase cited in the survey is higher than that seen by employers who buy coverage from the state's nonprofit health insurers, according to a statement from Jim Schowalter, chief executive of the Minnesota Council of Health Plans.
"These employers saw medical bills go up more than the 3 percent experienced for everyone served by Minnesota insurers," Schowalter said. "Higher medical costs at these businesses are terrible news for employees, and we're all looking at whether there are fixes that might help in the future."
The survey by the Minnesota Health Action Group, which is an employer coalition, collected responses from 95 public- and private-sector employers that either are headquartered in Minnesota or have employees in the state.
Last year, the New York-based consulting firm Mercer surveyed 108 employers in Minnesota and found total health benefit costs for active employees in the state increased 4.7 percent to an average of $11,883 per worker. Across the country, the average total health benefit cost per employee increased 2.6 percent last year to $12,229, according to Mercer.
The consulting firm said the lower premiums and higher rate of premium increase in Minnesota stemmed from a greater share of high-deductible health plans in the state.
Minnetonka-based UnitedHealthcare, the nation's largest health insurer, said in October that it planned to start selling coverage this year to small and large employers in Minnesota that buy "fully insured" coverage, meaning they pay a health insurer to carry the financial risk for medical costs. Previously, UnitedHealthcare administered "self-insured" health plans for some very large employers in the state that take the financial risk for claims.
In January 2017, Connecticut-based Aetna announced it was forming a new joint venture with Minneapolis-based Allina Health System, with the goal of selling coverage to large employers in Minnesota starting this year.
Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck
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