What is driving higher utilization and what are the implications of that trend?
Although only 27 to 42 years old in 2023, Millennials experience chronic conditions at significant rates. As compared to other age groups, this generation and their children are high utilizers of the health care system. Through this analysis, employers can learn about health trends that may impact their organizations and consider strategies that help to support employee health and may help to minimize medical spend.
The objective
To understand the greatest areas of disease burden and seek insights on this cohort’s higher-than-expected utilization and factors affecting their lives. In some instances, Millennials and their children are compared to other generations or groups in order to emphasize the variances.
Medical risks
Compared to Generation X, Millennials with common chronic medical conditions greatly exceed utilization, as shown in the charts below. This may indicate the potential for higher future utilization and increased spend by plan sponsors.
Millennial utilization and treatment compared to Generation X
Diabetes medical spend
- A larger portion of medical spend is attributed to Millennial diabetics than Generation X or Baby Boomer diabetics, indicating new diagnoses, higher outpatient utilization and/or crisis care
- Millennials and their doctors may attempt to control diabetes through diet or less-costly generic drugs more often than with older diabetics
- As a proportion of total spend, costs for Millennial diabetics are nearly as high as older generations, which is concerning given the age differences
Obesity rates
Millennials and their significant others have a low incidence of obesity compared to the total population:
- 2% of Millennial employees
- 0.7% of their spouses/partners
- 0.4% of their children However, they do have higher facility utilization, as noted above.
Behavioral health
Compared to pre-pandemic rates, behavioral health utilization is up 35% for Millennials and their children. Anxiety, depression and trauma disorders make up 66% of behavioral diagnoses for Millennials. Not surprisingly, per member per month (PMPM) spend has also increased.
The pandemic’s lingering effects Pandemic-related diagnoses may influence Health Action Council members for the foreseeable future:
- In 2019, 31% of post-traumatic stress disorder (PTSD) diagnoses were for Millennials; in 2022, that number was 38%
- Both pre- and post-pandemic rates are a disproportionate share of cases, as Millennials make up just 24% of Health Action Council membership
- Of the nearly 2,000 Health Action Council members impacted by long COVID-19 (PASC), 19% are Millennials, indicating they are coping with the pandemic better medically than behaviorally
Substance use disorder (SUD) and alcohol-related disorders Health Action Council Millennials:
- Are most likely to have SUD claims
- Slightly trail Generation X for alcohol-related claims
Pregnancy
Pregnancy is the top clinical cost driver for Millennials, accounting for 21% of employer PMPM spend.
A closer look
- Average employer paid: $17,000 to $27,000 per pregnancy
- Costs increase with complicating factors such as:
– Fertility treatment
– High-risk pregnancy
– Multiple births
– Extended hospital stays
– C-section delivery
Comparative statistics
High-cost pregnancies and newborns
- 1% of all pregnancies reached catastrophic costs (> $100K); of those 48.9% were Millennial mothers
- Critical newborns are 36 times more expensive than those born at optimal weight and gestation
Millennial pregnancy metrics by race
Neonatal intensive care unit (NICU) admissions and pre-term births for Health Action Council’s Asian, Black and Hispanic Millennial mothers are significantly higher than both the norm and Caucasian/other mothers.
Fertility treatments
- 17% of Health Action Council’s members in peak child-bearing years sought fertility treatment
- Typical costs (vary based on medical procedures or prescriptions)–Employer: $1,100–$5,500; employee: $400–$1,900
Parenting
Dependent utilization
Well-child visits for member dependents dropped drastically in 2020 but rebounded somewhat in 2021 and 2022.
However, immunization rates continue to decline and have never returned to pre-pandemic levels. Yet the risk is real: According to the World Health Organization, measles cases more than doubled in 2022 compared to 2021 (2).
Generation Alpha children with Millennial parents have significantly higher (38%) utilization than those born to other generations:
Comparative family size
Health Action Council Millennials have smaller families than members with Generation X heads of household (1.9 vs. 2.4 respectively). This correlates to national research that found Millennials overall are less likely to be married and/or become parents by age 38, in contrast to earlier generations at comparable times in history (3).
Financial impacts to health
Of the Millennials working at Health Action Council employers, 85% earn <$150,000 and gender disparities exist. Specifically:
Cost share by employee generation
Millennials pick plan designs with the smallest impact to their pay checks. However, high utilization means greater out-of-pocket costs from copays and deductibles over time. This disconnect between plan choice and utilization means Millennials are likely paying much more than their older Generation X and Baby Boomer coworkers.
Medical inflation and debt
- Since 2012, average risk adjusted (Risk adjustment mitigates effects of changes in contracting to create true comparability) medical cost per claimant increased 47%; that’s about $440 more paid by employees and $1,466 paid by Health Action Council employers
- Millennials carry greater medical debt than older Americans and incur it more often; most are mid-to-late 20s (4)
- 51% of Millennials reported an unexpected medical bill of over $2,000; 22% have no savings to pay medical bills (5)
Housing
- Many Millennials prefer urban areas, which tend to have costlier rental properties
- 36% report student debt as a major barrier to purchasing a home
- 45% rank saving for a home as a top financial priority
80% of Health Action Council Millennial members who were identified for SDOH outreach had financial concerns
Conclusion
Predicting and preparing for future employer spend
Health care utilization by Millennials and their children and the other trends identified in this white paper provide a window to what may be ahead. To bend the trends, there are strategies that may encourage better employee health and minimize future medical costs. Consider these as you develop your plan:
- Refocus. Continue to manage your high-cost claimants while developing, implementing and engaging employees in activities that will keep them healthy.
- Implement and promote disease prevention and lifestyle modification programs to delay and manage the onset of chronic conditions.
- Educate employees on:
a. Where and when to obtain care and the value of treatment protocols on their quality of life both in the short and long term.
b. The value of preventable disease immunizations. If you are offering onsite or shared clinics, offer immunizations to dependents or consider partnering with a local practice to run an immunization clinic several times a year. - Continue targeted fitness campaigns that combat obesity. Have a team join Health Action Council’s Step It Up program.
- Review your corporate HR and pay-scale policies to determine if they are driving inappropriate utilization or creating perpetual gender pay disparities.
- Support employee mental health by encouraging behaviors that help employees maintain balance or provide re-balance. Great options are healthy eating, exercise and sufficient sleep.
- Consider implementing flexible human resource policies to help address the conflict parents and caregivers may experience when focusing on their children’s needs and managing work responsibilities.
- Include family planning benefits to mitigate the risk associated with holding off on having a family.
- Expand engagement and involve the entire family in healthy practices as children mirror their parents’ health. Look for cultural alignment in engaging the entire family in healthy practices.
- Offer financial planning services, financial health tips and/or a savings strategy, or a student loan repayment benefit to employees.
There’s more to this story
Discover the data that supports and illuminates what is shared here. Learn more by contacting Patty Starr of Health Action Council or Craig Kurtzweil of the UnitedHealthcare Center for Advanced Analytics.
About Health Action Council–Health Action Council is a not-for-profit organization representing large employers that enhances human and economic health through thought leadership, innovative services and collaboration. We provide value to our members by facilitating projects that help to improve quality, lower costs and enhance individual experiences, and by collaborating with key stakeholders to help build a culture of health.
About UnitedHealthcare–UnitedHealthcare is dedicated to helping people live healthier lives® by simplifying the health care experience, meeting consumer health and wellness needs, and sustaining trusted relationships with care providers. The company offers the full spectrum of health benefit programs for individuals, employers, military service members, retirees and their families, and Medicare and Medicaid beneficiaries, and contracts directly with more than 1 million physicians and care professionals and 6,000 hospitals and other care facilities nationwide. UnitedHealthcare is one of the businesses of UnitedHealth Group (NYSE: UNH), a diversified Fortune 50 health and well-being company.
About Optum–Optum is a leading information and technology-enabled health services business dedicated to helping make the health system work better for everyone. With more than 100,000 people worldwide, Optum delivers intelligent, integrated solutions that help to modernize the health system and improve overall population health. Optum is part of UnitedHealth Group (NYSE:UNH). For more information, visit optum.com.
About UMR–UMR is the third-party administrator (TPA) line of business for UnitedHealthcare, providing customized solutions, cost-effective provider networks, dedicated customer service and member engagement solutions to self-funded medical, dental, vision and disability plans. We work closely with our clients to lower their medical costs, improve the health of their employee populations and help them achieve their benefits goals. Now serving 5.7 million members with custom plan designs, cost-containment solutions and innovative services, our 70-plus-year legacy of lasting relationships and customer retention speaks for itself.
