Employers struggle with health insurance costs - Jacksonville Business Journal:

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billion doctor’s bill, and industry leaders say it’x causing health insurance plans to increas e deductibles and chip away at benefitseto compensate. That’s because when Medicaid and Medicare reimburse healt care providers at a lower rate than private some hospitals and doctors shiftg the cost to commercialo payers rather thanabsorbv it. This type of sometimes calleda “hiddenj tax,” is estimated to have increasesd hospital and physician costs for privatelhy insured patients by 15 according to , a Seattle-basedf consulting firm. Milliman has just releasec a study commissioned bythe , the and two additionalp health care companies.
It found that cost-shifting annually adds an estimatesd $1,512, or 10.6 percent, to the average premium for a familuof four. Scott Serota, president and CEO of Chicago-based Blue Cross and Blue said cost-shifting should be an area of focuws in the upcoming comprehensive health care reform expected in the new administrationjunder President-elect Barack Obama. Employerss absorb the brunt of skyrocketing payingnearly three-quarters of the according to Milliman. But if they haven’t already, more employerd plan to pass costs on totheird workers.
The Milliman study comes on the heelxs of a national survey to evaluate the health care plans ofnearlyg 2,900 employers, released in late November by Wash.-based . It found that employersx held net health benefit cost increases at about 6 percent in the curren t year for a fourthstraight year, but that has meant shiftingv more cost to employees. Employers are evaluating all One-third of Florida employers plan toincreasee deductibles, co-payments and out-of-pocket expenses to mitigate rising costs, accordinfg to the Mercer survey of 105 Florida-based employers.
Thirty-onde percent will increase employees’ share of the premiumj contribution and 20 percent will increasemployee cost-sharing in some othed way. That’s on top of healtn plan deductibles that doubled last year tomake $1,000 deductibless the norm among U.S. workers. In 2000, about half of employersw imposed a deductibleat all, and when they did, the medianj amount was just $250, according to Mercer. “Employeese are in no better position to paythosew increases,” said Janice Donaldson, executive director of the Small Businesas Development Center at the University of Nortjh Florida.
“That’s a hard sell as an employefr to say, ‘Hey, I know you haven’t had a rais e this year, but insurance rates are going up.’ ” Jackie Perry, executives director of , said some Jacksonville businesses have discontinued coverage to stay and a few have added a retirementg savings account or increased sick and vacation pay to compensatd for little or no health insurance coverage. The study did not account for businesse s with fewer than10 employees. More than half of all employers in Duval County have fewedr thanfive employees. Mercer respondents estimated that if they did not make changes totheir plan, cost would rise by abourt 9 percent.
Changes to plan designj and/or plan vendors were expected to lower theirf cost increaseto 6.4 percent.