Alabama employers balance rising healthcare costs, quality coverage

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September 8, 2023

As the nation grapples with rising healthcare costs, Alabama employers and providers are on the front line.

This is felt particularly amid a rapidly evolving healthcare landscape marked by groundbreaking, yet costly, treatments.

Drawing from a recent annual survey by the Business Group on Health, Axios reported employers are seeking strategies to curb rising costs without shifting the burden to their employees.

“The survey of 152 companies found employers expect their health costs to rise 6% next year after accounting for measures they use to keep costs in check,” Axios says.

“The vast majority of employers (96%) said they will continue to use prior authorization in their pharmacy plans, step therapy (94%) — in which patients must try cheaper medications before receiving costlier ones — and use of lower-cost care settings for physician-administered drugs like biologics.”

Robin Stone, executive director for the Alliance of Alabama Healthcare Consumers, said, “Alabama businesses, large and small, are investing in their workforce by providing access to high quality healthcare for their employees and their families.”

The Alliance represents a group of Alabama employers standing up for high-quality, low-cost healthcare in the state. Stone, who previously served as CEO of the Business Council of Alabama, is at the helm.

A 2022 report by the U.S. Department of Health and Human services showed Alabama has the fourth-lowest average annual single premium and family premium nationwide.

“However, the rising cost of healthcare, particularly pharmaceutical drugs, continues to be a serious financial challenge for employers who want to continue providing high quality employee benefits,” Stone said.

Ellen Kelsay, Business Group on Health CEO, shares that concern, telling Axios, “As they have done in recent years, the companies in many cases are swallowing the bulk of increases instead of passing them on to employees.”

“How long they’re able to do that based on … conversations about the overall trend growing at an alarming rate is to be seen,” she said.

The annual survey strongly suggests the pipeline of groundbreaking treatments promises transformative health outcomes but at unprecedented costs.

“A balance must be sustained between the rising utilization of new, expensive drugs and other emerging treatments, and the cost of that care, if benefits are to be kept affordable and sustainable in the long term for employers and their workforce,” Stone said.

Grayson Everett is a staff writer for Yellowhammer News. You can follow him on Twitter @Grayson270