Health cov­er­age costs still ris­ing

Study finds com­pa­nies are pay­ing dou­ble and work­ers triple what they did a decade ago.

Los Angeles Times - - Business - Duke Helfand

Em­ploy­ers’ premi­ums dou­bled while their work­ers’ costs tripled in the last decade, and both will pay more in 2011, a study shows.

Health­care premi­ums paid by large U.S. em­ploy­ers have more than dou­bled over the last decade, but the costs to their em­ploy­ees more than tripled, a study re­leased Mon­day found.

And next year com­pa­nies can ex­pect health­care costs to rise nearly 9% on av­er­age — the largest in­crease in five years — as they con­front an ag­ing work­force, large med­i­cal claims and changes brought by the health­care over­haul.

The study by hu­man re­sources firm He­witt As­so­ci­ates found that Los An­ge­les, Sacra­mento, San Fran­cisco and San Diego were among the metropoli­tan ar­eas na­tion­wide where em­ploy­ers have ex­pe­ri­enced the largest cost in­creases this year.

“Ev­ery­one has a strong fo­cus on costs and the need to find so­lu­tions,” said Jim Win­kler, a man­ag­ing prin­ci­pal in He­witt’s health­care busi­ness line. “It’s a very se­ri­ous con­cern.”

The study is based on cen­sus data and in­surance in­for­ma­tion for 350 com­pa­nies in He­witt’s data­base. The firms range in size from 1,500 em­ploy­ees to more than 200,000 and have ac­counted for nearly $52 bil­lion in health­care spend­ing this year.

He­witt projects that such com­pa­nies will spend $9,821 per em­ployee on av­er­age for in­surance next year, up from $9,028 this year — an 8.8% in­crease and more than dou­ble what they paid in 2001.

Em­ploy­ees will be asked to con­trib­ute an av­er­age of $2,209 of the cost, a 12% in­crease over this year’s con­tri­bu­tion. Work­ers also will face higher out-of-pocket costs to see doc­tors, bring­ing their to­tal ex­pense on av­er­age to $4,386 — more than three times the amount they paid in 2001.

Em­ploy­ees face higher costs as com­pa­nies shift an ever-larger share of in­surance premi­ums and health­care costs to them.

The lin­ger­ing re­ces­sion is af­fect­ing ev­ery­one in­volved, He­witt an­a­lysts said, as com­pa­nies hang on to vet­eran work­ers and de­fer new hir­ing. Older em­ploy­ees, in turn, have higher health­care costs.

The re­cently adopted health­care over­haul pack­age also is ex­pected to drive up in­surance rates and sad­dle em­ploy­ers with new costs. He­witt cited new rules that, among other things, al­low adult chil­dren to re­main on their par­ents’ in­surance plans through age 26.

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