Healthcare Insurance Costs Rising 7 Percent This Year, But Slower than Last

By Deborah Hirsch
TMCnet Contributor

Once again, employers are faced with growing cost increases in employee health benefits, and many are thinking high deductibles for employees may be the answer, according to a story by Sam Baker.

A recent survey by the National Business Group on Health (NBGH), a not-for-profit association of 342 large employers, has found that costs will rise 7 percent this year.

Seventy percent of large companies surveyed in June by the association and Towers Watson said they’ll offer high-deductible insurance by 2013, along with accounts “that let patients buy medical services with pretax dollars, often funded by the employer,” Jay Hancock reported.

Nearly a fifth of the firms responding to the survey, however, said high-deductible coverage would be the only option in 2013.

What about health reform? Many suggest it will make it worse, including Helen Darling, in a story in the Charlotte Business Journal. That’s because of the mandated benefits required by the law and its administrative requirements, she said.

An additional challenge is the Obama Administration’s decision to leave it up to states to define what benefits have to be provided in insurance plans, possibly forcing some large employers to offer 50 different insurance plans in 50 different states, Darling told Jen Wilson at the Journal.    

The survey’s findings, released today, are based on the responses of 82 large employers out of about 250.

Employers with between 5,000 and 100,000 employees on average are reportedly budgeting the same for 2013 as for 2012.

As a result, Fleming wrote, “the trend of shifting costs to employees will likely continue,” supplying the information that 60 percent of respondents said they plan to increase employee contributions to insurance premiums. Other methods of cost-shifting mentioned by employers include higher out-of-network deductibles.

But there is some good news for employers. Starting in 2014, the healthcare law will allow them to increase incentives for participation in programs that require an employee to achieve an agreed-upon wellness goal, such as giving up tobacco or losing a certain amount of weight, which, of course, if achieved, will lower costs for the employer.

The incentive can be as much as 30 percent of an employee’s insurance costs, and in some cases as much as 50 percent. That is up from 20 percent allowed by law now.

But there is some good news. While costs are indeed growing, they’re growing a little more slowly, according to Ezra Klein.

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