Tuesday, January 8, 2008

Health Care and Employee Costs in the New Year

This year, 2008, we are facing increased health care costs including higher rates for insurance, medical procedures, hospital charges, prescriptions, and much more. In December, 2007, the California Employer Health Benefits Survey was released and showed dramatic increases in that state's employer-based health insurance premiums. The national gain was over 6%, a little more than two points behind California. The study researches coverage, cost, availability, benefits and enrollment not only in that state but also across the nation. Costs rose for both HMOs and PPOs. The forecast for 2008 indicated that 41% of companies with over 200 employees were very to somewhat probable to increase what their workers would pay toward insurance this year.

As a matter of fact, health care costs are increasing on an ongoing basis. You really don't need a study to tell you that. Just look at what you pay for medicine or for your insurance. Health care is the Number One concern with employees. According to the study released recently by the Center of State and Local Government Excellence, the top rated aspect of a job is the health insurance plan of the employer according to 84% of the participants surveyed. Health benefits are extremely important to employees and their families, and they are the primary factor in job satisfaction. That is one reason why about half of all employers estimate benefit costs as a percentage of payroll to be 31% or more according to the International Society of Certified Employee Benefit Specialists.

Just very recently, Employee Benefit News online reported late in 2007 that costs for the most popular health plans in the U.S. are expected to increase by double digits into 2008 from information gathered and analyzed by Buck Consultants. Prescription costs are anticipated to rise by almost 12%, and dental costs were expected to increase by 5-6%. Cost shifting to employees is a major concern in the market place, with workers, and among employers. At the end of December, 2007, the Detroit News reported that some employers will no doubt pass on health insurance increases to employees--some companies will absorb the increased costs, and some will pass all of it on to workers. The majority of employers will share the added expense with employees. This translates to higher costs for the vast majority of Americans who receive their health insurance from their jobs. Employees will be grappling with higher premiums, more expensive co-pays for doctor visits and prescriptions, higher deductibles, and possibly reduced benefits. I personally had to deal with this issue and now must pay more into the system with decreased benefits because our rates went way up for this year. "I feel your pain"!

Each year, more and more costs are being shifted to employees. Now the emphasis is toward setting up incentivized wellness plans, especially in companies where the cost of benefits has increased so much that employers are forced to the point of cutting back on coverage. Significant changes are taking place in the workplace that will make both employers and employees to make difficult choices in health care and insurance coverage. This can be anything from a high-deductible health plan offers and flex plans to more participation by employees in health risk appraisals and aggressive lifestyle programs at work and using generic medications versus name brands.

Whatever the situation, the cost of staying healthy is going up. There are a number of reasons why health insurance costs are going up: an aging population, more expensive technologies, raises in medical personnel salaries, and less Medicare coverage by the government. Employers still handle the majority of benefit costs; however, the days are gone when employees could expect 100% coverage as part of their job. The inflation in health care continues, and it will keep going up until a workable solution comes along. And although health care is more expensive now than ever, most American workers still find the insurance plan offered to them as acceptable. Either way, get ready to open your wallet.

Until next time. Let me know what you think.

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