Employers say benefit changes on way as healthcare expenditures continue to soar
More costs continue to be shifted to workers, survey shows
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Major employers continue to pass more of the costs of healthcare onto their workers, even as they seek to improve their employees’ overall wellness, according to Modern Health
care’s third annual Healthcare Purchasing Power survey.
A total of 35 employers participated in the 2010 survey. To qualify, employers must have a minimum of $1 billion in annual revenue. The survey was co-sponsored by the Leapfrog Group and the National Business Coalition on Health.
The survey results indicate that employers are still grappling with rising healthcare costs. The survey covered fiscal 2009, so changes mandated in the federal healthcare reform law had not yet come into play. Still, in interviews, participants said they are gearing up for such changes in various ways.
General Motors Co. topped the list, with healthcare expenditures of $4 billion in 2009. General Motors covered 850,000 people last year, at a cost of $4,700 a person. General Electric Co. fell to the second slot, after coming in at No. 1 in the survey last year. GE reported healthcare expenditures of $2.2 billion in 2009, up from $2 billion in 2008. GE had 537,000 total covered lives in 2009, down from 566,000 covered lives the year prior.
Catholic Health Initiatives took the No. 3 spot, up from fourth in last year’s survey. The Denver-based hospital system reported $355 million in healthcare expenditures for 2009, an increase of nearly 11% over 2008, when it spent $320 million. For 2010, the system expected to spend $349 million, a decrease of 1.7%, but for 2011, it expected healthcare expenditures to grow once again, to $371 million, according to the survey.
This is the first year GM participated in the survey, and it will most likely be the last time it is on top. GM filed for bankruptcy protection in 2009 and was rescued by the federal government, which then went on to initiate a massive restructuring. Under an agreement made in 2008, GM agreed to shift its retiree healthcare benefits to the United Auto Workers Retiree Medical Benefits Trust at the end of last year. As a result of this change, GM this year provided health benefits to only 210,000 people, a 75% decrease in covered lives in one year.
GM made substantial changes to its plan offerings as well amid the restructuring. It canceled coverage for Medicare-eligible retirees and reduced plan offerings for salaried workers to two health savings account-qualified high-deductible health plans. The automaker also canceled vision coverage for salaried employees, according to the company. About 66% of the company’s workers are under a union contract.
After a turnaround, GM announced on
General Motors, which has undergone bankruptcy and restructuring, made big changes to its plan offerings and saw a 75% decrease in covered lives.