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Kaiser survey finds 40% of companies planning to hike employee premiums
By Cheryl Powell
Beacon Journal medical writer
Published on Thursday, Sep 25, 2008
Get ready to add ''health care'' to the list of things that probably will cost you more next year.
A national survey released Wednesday reveals that 40 percent of companies say they're ''very likely'' or ''somewhat likely'' to increase the amount employees pay for their health insurance in 2009.
Rising medical costs are nothing new for American workers, who already have seen their average share of annual premiums for family coverage jump from $1,543 in 1999 to $3,354 this year.
Those are among the findings in the annual employer health benefits survey by the Kaiser Family Foundation and the Health Research & Educational Trust.
''We're in a period when people are paying more of the bill and, at the same time, being hit with other economic shocks,'' said Jon Gabel, co-author of the Kaiser study and senior fellow at the National Opinion Research Center at the University of Chicago.
From 1999 to 2008, the amount the average worker paid for family health coverage increased 117 percent, while their wages increased only 34 percent.
And there's no relief in sight.
Another survey released this week by national human resources consulting firm Hewitt Associates predicts an average premium increase next year of 6.2 percent per employee — from $8,373 to $8,891 — for employers in the Akron-Cleveland area.
The average employee contribution toward premiums for Northeast Ohio workers is expected to increase from $1,751 this year to $1,884 next year, according to Hewitt.
The Kaiser study also found that more than 40 percent of employers are somewhat or very likely to take one or more of these cost-cutting actions: increase deductibles, impose higher co-pays for doctor visits or increase the amount workers and their dependents pay for prescription drugs next year.
''The trend is toward less comprehensive, skimpier insurance with higher deductibles and out-of-pocket costs,'' said Drew Altman, Kaiser's president and chief executive.
For Akron-based SummaCare, the premium percent increase this year for area companies is averaging in the high single digits, said Kevin Cavalier, vice president of sales.
Although the increases are lower than several years ago, employers still are shopping for lower rates and increasing the co-pays and deductible workers must pay, he said.
In fact, he said, about 40 percent of plans sold this year to employers had deductibles of $1,000 for individuals and $2,000 for families.
''There's a lot of cost shifting going on, either in increasing the employee contribution — what comes out of their paycheck for the cost of health care monthly — or buying down benefits,'' Cavalier said.
About 35 percent of workers in businesses with fewer than 200 employees this year must pay at least $1,000 in out-of-pocket costs in most cases before their insurance plan will start paying for their medical bills, the survey found. Last year, only about 21 percent of employees at small businesses faced deductibles of $1,000 or more.
For employees at companies of all sizes enrolled in the most popular form of managed-care insurance plans, the average deductible this year is $560, an increase of almost $100 from 2007.
Hewitt Associates anticipates that the average American worker's total medical costs — including their share of the premium and all out-of-pocket costs — will be $3,826 next year, an increase of almost 9 percent from $3,513 this year.
''It's a substantial financial burden for families to bear on top of other things going on in our economy,'' said Gordon Erley, senior consultant for Hewitt Associates in Ohio and Michigan. ''Families are really having to budget more effectively for the things that aren't covered by their plan.''
Faced with rising insurance costs, small businesses, particularly, are dropping coverage altogether, said George Stadtlander, chief underwriter and vice president for individual and small group sales for Medical Mutual of Ohio.
Medical Mutual studied 10 ZIP codes throughout the state last year and discovered about 58 percent of the employers with 100 or fewer workers had dropped health insurance coverage during the past 10 years, he said.
Consequently, he said, ''there has been a movement to increase the financial responsibility of the individual participant. . . . The theory is if the consumer is more responsible, if the consumer has greater visibility as to their cost, they'll become a better shopper.''
Along with shifting more cost to workers, companies increasingly are looking to lower their medical expenses through wellness programs.
The Kaiser survey found that more than half of all firms that provide health insurance offer at least wellness programs — items such as gym membership discounts, stop-smoking programs and Web-based health resources.
Akron-based FirstMerit Corp. is ''investing in wellness'' by launching an employee Web site dedicated to health and wellness and offering health screening, stop-smoking classes and other programs, said Cathy Todd, vice president of corporate benefits.
Next year, the banking company also will charge workers who smoke more for their health insurance, Todd said.
''That's our main focus for the next couple years — wellness and keeping our employees well, because 80 percent of our costs are borne by 20 percent of our employees,'' Todd said. ''And if you look at that, 70 percent of those expenses are preventable.''
Cheryl Powell can be reached at 330-996-3902 or chpowell@thebeaconjournal.com.
Get ready to add ''health care'' to the list of things that probably will cost you more next year.
Get the full article here.
Comments
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Akron, OH
Posted 10:07 AM, 09/25/2008
This, just after the home-heating industries proved the gloom & doom mass media wrong.
This Place, 32
Posted 10:34 AM, 09/25/2008
Looks like I should open up some Health Care business. At this rate, I could charge $100.00 for one Advil and fleece the nation!!!!! Oh wait, the hospitals and health care companies already do that. D'OH!
Posted 12:21 PM, 09/25/2008
Soon everyone will be working at home, there are so many online companies now! Why can't the companies have the big cheesehead take a cut in his pay or his bonus?????
m, m
Posted 01:13 PM, 09/25/2008
There are better options for reduced cost of care, yet AMA lobbyists and fear of lawsuits keep cost high. And our government does not help, imposing rules that only drive up cost on a basic plan for a healthy person.
Posted 02:53 PM, 09/25/2008
the tides are turning for america.no jobs , no money to save for retirement , 4.00 gal gas , rising insurance premiums , rising health costs, rising crime, unstable government , fighting a unwiniable war against terrorism , probably no social security when i am old enough to retire , you bet our taxes are going up up up, yesterdays article about cutting out a large amount of welfare ect.. oh my every billy is gonna blow up when their monthly paycheck isn't there.that's ok because they will steal whats yours. . our country is on it's way to a war within it's self, people are going to need to survive and i don't like to think about the consiquences we will find ourselves into .
