2022 Renewals Too High? You Only Have One Option Left

We?are seeing?rate increases come in across employers for 2022,?and?the news?is not good. Fully-insured renewal rates are between 10%-20%,?and?self-insured stop loss?is?at 5%-10%.?Employers?have approximately 70 days until coverage takes effect, and there is only one step that can have an impact at this point.?

In 2021, rate increases started high because of ambiguity around the impact of COVID-19?and high utilization. But utilization ended up relatively low as elective surgeries?fell?nearly 30% in 2020 from the run rate. The vast majority of COVID?hospitalizations and ICU utilization?were?from Medicare patients, not employer-sponsored?patients.

In 2022, the reasoning?behind?the sharp?rise in rates?is the?pent-up demand for services, specifically for?procedures pushed out until the coming year?and?catastrophic events?that?are now more likely to occur because of delayed care. Catastrophic events from chronic patients are?indeed?more likely, but surgical utilization and high-cost emergency events, e.g., trauma and burn, are still expected to be below 2019 levels. When this nets out,?does this equate to a 10%+ increase??

So, what now? Narrower network??Reference-based pricing? Direct primary care? Captive? High-cost drug carveouts? New TPA? None of these?solutions?are feasible for 2022 at this point,?and?some?offer?little to no benefit?regardless of?the year.?

You have one option in?the?70 days?left?of?2021. It’s a mantra we?often use?at?Mployer?Advisor that bears repeating here: Who you choose as your employee benefits advisor or broker has the single largest impact on?your?benefit plan’s?cost and quality.?I was speaking to a broker yesterday who was excited they moved a new client from 25% renewal down to 4% based on working with the carrier.?It was not?magic,?it was just standard diligence by a strong broker.?

?If you get?dinged with?the same high increase?every year?and think,?“I need to do something about this,”?let this be a sign that?the time is now. A quote often?used and?mistakenly?attributed to?Albert?Einstein?comes to mind:?“Insanity is doing the same thing?over and over?and expecting different results.”??

?At some point, it is no longer the broker or carrier’s fault–the blame must fall to you.?

You pay the carrier,?and?you pay the?broker–you, the employer,?are in control. If you are not happy, make a change. There are 70 days left in the year. It took the Europeans in the 1500’s 40 days on average to sail across the Atlantic to the Americas on a wooden boat with no internet and only a compass. You can find a new benefits advisor and carrier in the 70 days left. The decision?is up to you.??