Health insurers are likely looking for ways to cut costs this year as they struggle to cope with the rise of new technologies, a key reason the industry is set to lose billions in 2019.
Here are some of the biggest drivers: Health insurance coverage has a big impact on health insurance premiums, and in some states, that’s just one thing that’s happening.
The industry’s biggest health insurers, which include UnitedHealth Group and Humana, are working on reducing their costs by raising deductibles and out-of-pocket costs.
The combination of higher deductibles coupled with higher out-pocket expenses will put pressure on insurers in the coming years to cut their costs, according to Mark Kantrowitz, an analyst with Morningstar, a financial research firm.
Health insurers will have to cut some costs in order to get a return on their investment, he said.
“That’s not easy,” he said in an interview.
The insurance industry has a number of options it can use to reduce its costs, including consolidating insurance companies and lowering their employee compensation and premiums, according the Kaiser Family Foundation.
In 2019, the average deductible for a large employer-sponsored health plan is $2,600 for a full-time worker and $1,400 for a part-time one.
That’s roughly half the average for private plans, which typically range from $5,500 to $9,800.
If you work in a part time capacity, your average deductible could go as low as $800.
“There are lots of ways to reduce the cost of insurance for employees,” said David Miller, chief executive of the insurance consulting firm Avalere Health.
In 2018, the median deductible for private coverage was $2.4 million for a worker with full- or part- time work.
For health plans that cover a wider range of workers, it could range from about $2 million to $7.5 million.
A 2017 report from the Congressional Budget Office found that “higher deductibles have been associated with higher costs, particularly for the large employers in health plans for most Americans.”
Some insurers are planning to make changes to their policies to lower their costs.
Anthem announced this week it would cut its average deductible to $1.25 million for workers in full- and part-timers, from $2 to $2.,000.
The company also said it would stop charging workers for coverage on their cars.
Other insurers are also looking to reduce their costs as they seek to meet growing demand.
AARP, which represents many older Americans, is planning to reduce benefits and offer cheaper plans to retirees and the disabled.
“The more people are able to purchase the insurance through Medicare, the less they’re going to need,” AARP chief executive Carrie Coyle said in a statement.
Anthem is also moving toward using data to determine how many of its workers have a health problem, including chronic illnesses.
The health insurer said it plans to make the process of determining if a person has a chronic health problem a priority.
“As more and more people seek coverage through Medicare and Medicaid, the need for more accurate information will increase, as well as the need to identify those who have a high risk of becoming disabled or underinsured,” the company said.
In 2020, the Centers for Medicare and Medicare Services (CMS) released a report called “The Future of Health Insurance.”
The report predicted that the health care industry will need to raise premiums by $10 billion to $20 billion in 2019, but that’s a small number compared to the industry’s total health care costs of more than $1 trillion.