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#1 Driver of Healthcare Costs is Age

#1 Driver of Healthcare Costs is Age

By: Eric Bricker, MD

Health plan member demographics and their impact on health and healthcare are important for all employee benefits professionals to understand. Of various demographic categories, AGE is the #1 driver of healthcare costs for employer-sponsored plans.

Here is a breakdown of healthcare costs per person per year by age:

Less than 18: $3,628

19 – 44: $4,422

45-64: $8,370

65+: $18,424

As we can see for employer-sponsored plans, health plan members 45-64 years old are almost TWICE as expensive as members who are 19-44 years old. Note: this post is in no way implying that employers should discriminate based on age. That is illegal.

It is important to know that the median age of an American worker is 43 years old. However, not all industries have the same distribution of employee age. It is highly variable by industry. Some industries tend to have older employees and older health plan members and other industries tend to have younger employees and younger health plan members.

Industries with the highest average employee age:

Government/Municipalities: 46 years old

Manufacturing: 44

Education: 44

Transportation: 44

Conversely, many tech/software companies have very young employees. The average age of a Meta/Facebook employee is 28 and the average age of a Microsoft employee is 33.

Employee age and its impact on healthcare costs across different industries have important implications for employee benefits professionals:

1. You don’t need a lot of claims data and analytics, just use AGE as a proxy for high-healthcare utilizers.

2. Open Enrollment education should be tailored to older employees since they are the ones to most likely need healthcare and generate claims.

3. Vendor utilization (e.g. Diabetes point solution, Musculoskeletal program) should be measured with older employees (i.e. older than 45) in the denominator rather than all employees. Chances are, the younger employees do not need the vendor’s services.

4. The types of vendors a company uses should be based on employee age. Companies with young employees should use healthy mom/baby programs and mental health programs since these are the greatest need for younger employees.

How Coupe Health tailors its health plan by employee age:

The Coupe Health approach uses healthcare navigation INSTEAD of traditional customer service as the frontline interface with health plan members. The Coupe navigators are called ‘Health Valets’ and they guide members with finding providers, scheduling appointments, comparing cost and quality, and resolving care coordination problems such as moving medical records from one doctor to another.

The navigation needs of health plan members vary greatly based upon their age. The Coupe Health Valets customize their interactions with each member and then rather than just ‘giving the member information,’ the Health Valets take action and carryout the often complex series of steps necessary to solve the health plan member’s problem.

You can dramatically improve the care health plan members receive. Strategically addressing plan member age is a great place to start.






Tech Company Employee Age: https://www.businessinsider.com/median-tech-employee-age-chart-2017-8

Healthcare Costs by Age: https://www.healthaffairs.org/doi/10.1377/hlthaff.2013.1224

Employee Age by Industry: https://www.bls.gov/cps/cpsaat18b.htm