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Redefining the Safety Net

Should California establish a Basic Health Program for certain low-income residents? CHCF's Marian Mulkey captures a recent policy conversation in a Health Affairs blog.

Accountable Care in Action

A new post on the Health Affairs blog details how CalPERS kept costs down in Sacramento through a "virtual" ACO with insurers and providers.

Career Opportunity: Senior Program Officer

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Business

Friday, August 19, 2011

Employers Expect Rise in Health Costs; Many To Pass Costs to Workers

Large U.S. employers expect their health care costs to increase by an average of 7.2% next year, according to a according to a survey by the National Business Group on Health, Modern Healthcare reports (Daly, Modern Healthcare, 8/18).

The increase is slightly less than the 7.4% mean increase for health care costs that the companies reported for this year. However, the new figure "is on a higher base, and it still outpaces the economy's anemic growth and business conditions," according to NBGH President and CEO Helen Darling (Reichard, CQ HealthBeat, 8/18).

According to the survey, more than half of businesses plan to pass at least some of the extra costs to workers. Darling said employers are shifting away from copayments, where workers pay a fixed dollar amount for health services, and instead are charging workers a percentage of the total costs. This makes employees more aware of the total cost of health care they use, The Hill's "Healthwatch" reports.

Darling said shifting from copayments to the coinsurance model is "a more subtle way to increase what the consumer pays." She said that eventually only governments and unions likely will offer fixed copayments (Baker, "Healthwatch," The Hill, 8/18).

Darling said the federal health reform law has contributed to rising costs. She attributed one full percentage point of the increase to a provision allowing young adults to stay on their parents' insurance until age 26. She said, "I think that most employers didn't think that (the requirement) was a good idea," noting that individuals with jobs and substantial benefits can stay on their parents' insurance to avoid more cost-sharing (CQ HealthBeat, 8/18).

According to Darling, the financial strain of the ongoing increases in health care costs has created "an unsustainable model for our country" (Modern Healthcare, 8/18).

Reader Comments:
  • 2
  • 08/21/2011
  • Lynette Graves

Instead of passing additional cost to workers why don't employers finally stand up to the insurance companies. When will anyone stand up to insurance companies? Regardless how much the premiums cost the out of pocket (copays and deductibles) increase as well not to mention non-covered items.

  • 1
  • 08/19/2011
  • Samir Qamar

Monterey-based MedLion, Inc. is the first low-cost direct primary care practice in California. With locations in Monterey, Mountain View, Oakland, and San Francisco, the company is specifically helping employers offset the high costs of health benefits by offering an alternative to employees who choose to opt out of their company's health plans, many of which are cost-probitive. MedLion Direct Primary Care also allows employees quicker access to clinicians directly from the workplace, decreasing sick days and increasing overall company productivity as well. MedLion is currently planning a statewide expansion, followed by a national expansion in the very near future.



Readers are invited to send feedback to: chl@chcf.org