If you’re lucky enough to receive workplace health benefits, you may have noticed a shift lately towards generic medications and services. That’s because an aging workforce is poised to ramp up heath costs for employers in the near future, according to a recent survey by research firm Towers Watson. Employers are looking to soften the blow of these increased costs, especially as they’ve been lower than usual over the past few years – a profit margin employers are keen to keep after experiencing a doubling in expenses over the past decade.
Slower Economy, Lower Healthcare Costs
Finally a silver lining to a slower economy – employers have seen their benefits costs moderate over the past couple of years. Health and dental benefit expenses only increased 2.1 per cent last year, less than the 2.7 per cent increase in 2011. What is behind this slowdown in health expenses and what does it mean for employees? Let’s take a look.
Employers Encouraging The Use Of Generic
Two of the biggest health care costs faced by employers are prescription drugs and dental care. Prescription drugs costs actually decreased by 0.2 per cent, while the dental care was up a marginal 1.3 per cent in 2012 compared to a year ago. Employers are encouraging the use of generic drugs with their employees and it’s paying off.
“This trend can be explained by a number of factors,” says Wendy Poirier, Towers Watson’s Canadian Health and Group Benefits Leader. “As many commonly prescribed drugs have recently come off patent, employers are seeing the results of increased use of generics at substantially lower costs. They are also benefiting from drug plan management strategies that mitigate waste and increase efficiencies, and the effect of beneficial plan design features such as early exposure to preventative dental coverage.”
Special Drugs and Physiotherapy Costs Up
Although only used by less than five per cent of the workforce, specialty drugs for treating chronic illnesses such as cancer have increased in popularity, representing 15 to 25 per cent of the total health care cost spent by employers. That’s expected to increase to 30 per cent or more over the next three to five years.
Medical services including physiotherapy, chiropractic, and naturopathic treatment have increased in popularity and cost over the past several years. Those expenses are up a robust six per cent in 2012 from 2011.
“It is important for employers to keep an eye on the increased utilization of these health care services,” says Bourassa. “They can be an important part of a wellness program, but left unmanaged may increase active and retiree costs unnecessarily, due to the effects of an aging plan membership and the continued de-listing of services covered by government programs.”
How You Can Save On Healthcare Expenses
We’re always looking for new ways to save money, and health care expenses are no different. Even if you have a healthcare spending account, it’s a good idea to spend your money wisely to get the biggest bang for your buck. Here are a few easy ways to save without putting your health at risk.
• Use generic over brand name drugs. Not only do generic drugs usually provide the same benefits, they typically cost a lot less.
• Shop around for the lowest dispensing fees. Although it can be convenient to go to your local drugstore, it’s a good idea to compare dispensing fees to see if you’re paying too much.
• Coordinate your benefits with your spouse. Why pay for extra coverage when you don’t need it? If your employer has a flex benefits plan you can choose the coverage you want and claim any expenses not covered under your spouse’s plan.
• Ask your dentist about their fee schedule. If your health care plan doesn’t provide full coverage like most, you’ll want to ask about your dentist’s fee schedule to see if you’re paying more than you need to.