16 March 2007

Business healthcare costs up 8%

Kaiser Daily Health Policy Reports notes that healthcare costs for big companies rose 8 percent in 2006, nearly double the inflation rate. That's according to a survey conducted by Watson Wyatt Worldwide and the National Business Group on Health.
The survey also found that 9% of U.S. employers plan to offer only a high-deductible health insurance plan next year to employees, compared with 5% in 2007, Reuters reports.

The survey included 573 large companies, defined as companies with greater than 500 employees (Dixon, Reuters, 3/15). The companies employ a total of 11 million people (AP/Chicago Tribune, 3/16). The survey found that 38% of companies offered a high-deductible plan among several different options in 2007, up from 33% in 2006.

The median percentage of employees enrolling in these plans was 7% in 2006 and 8% in 2007. Ted Nussbaum, director of health consulting at Watson Wyatt, said, "Employers can offer these plans, but it takes more than that to get employees to enroll." The study also found that companies with at least 10% of their employees enrolled in high-deductible plans coupled with health savings accounts saw health care cost increases of approximately 6.5%, compared with an average increase of 8% across all employers surveyed. Gail Shearer of Consumers Union said, "There is a concern about whether we are working our way toward a system where high deductibles are the norm and consumers don't have a choice," adding, "If you are a person of low or moderate income, if the deductible is very high, there will be financial barriers to care" (Reuters, 3/15).

In addition, the survey found that 33% of new hires will receive financial support for medical coverage during retirement from their employers, compared with 43% of current workers (AP/Chicago Tribune, 3/16).
How about that quote, that it's one thing to offer the junk insurance plans, but "it takes more than that to get employees to enroll."

Desperation, for beginners.

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