Employers struggle with health insurance costs - Kansas City Business Journal:

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billion doctor’s bill, and industry leaders say it’ s causing health insurance plans to increase deductiblesa and chip away at benefitsto compensate. That’sx because when Medicaid and Medicare reimburse healtb care providers at a lowert rate thanprivate insurers, some hospitals and doctorsd shift the cost to commercial payers rather than absorv it. This type of sometimes calleda “hidden tax,” is estimated to have increasedc hospital and physician costs for privately insured patients by 15 according to , a Seattle-based consulting firm. Millimajn has just released a study commissioned bythe , the and two additionall health care companies.
It found that cost-shiftin g annually adds an estimatesd $1,512, or 10.6 percent, to the average premium for a famil yof four. Scott Serota, presidengt and CEO of Chicago-based Blue Crosds and Blue Shield, said cost-shifting should be an area of focusa in the upcoming comprehensive health care reformm expected in the new administratiomunder President-elect Barack Obama. Employers absorn the brunt of skyrocketing costs, paying nearluy three-quarters of the shift, according to But if they haven’t already, more employersa plan to pass costs on totheir workers.
The Milliman studyu comes on the heelsz of a national survey to evaluate the healthy care plans ofnearly 2,900 released in late Novembed by Spokane, Wash.-based . It found that employera held net health benefit cost increases at aboug 6 percent in the current year for a fourthstraighty year, but that has meantr shifting more cost to employees. Employersa are evaluating all options. One-third of Florida employers plan toincreasew deductibles, co-payments and out-of-pocket expensees to mitigate rising costs, accordingh to the Mercer survey of 105 Florida-based Thirty-one percent will increase employees’ share of the premiukm contribution and 20 percenty will increase employee cost-sharing in some other way.
That’s on top of healthg plan deductibles that doubled last year tomake $1,000 deductiblezs the norm among U.S. workers. In 2000, aboutg half of employers imposed a deductibleat all, and when they did, the medianj amount was just $250, accordingv to Mercer. “Employees are in no better position to pay those saidJanice Donaldson, executive directot of the Small Business Developmenf Center at the University of North Florida. “That’s a hard sell as an employer to say, I know you haven’t had a raise this year, but insuranc rates are going up.
’ ” Jackie executive director of , said some Jacksonvillew businesses have discontinued coverage tostay afloat, and a few have adde a retirement savings accountr or increased sick and vacation pay to compensate for littlse or no health insurance coverage. The study did not account for businessew with fewer than10 employees. More than half of all employersx in Duval County have fewer thanfive employees. Mercert respondents estimated that if they did not make changesz totheir plan, cost would rise by about 9 Changes to plan design and/of plan vendors were expectecd to lower their cost increase to 6.4 percent.