Business Services Industry

The health care malaise

Workforce, July, 2002 by Carroll Lachnit

Judging by everything we've read (and in some cases, what we've written), the rising cost of their health-care benefits. But that's not what researchers you would think that employees would be in full-fledged revolt over found in the new "National Survey on Health Care," sponsored by National Public Radio, the Kaiser Family Foundation, and the Kennedy School of Government at Harvard University. You can read more about the survey at www.kff.org/content/2002/20020605a/.> According to the survey, 39 percent of employees said the amount deducted from their paychecks for health-insurance premiums had stayed the same during the last 12 months. Another 35 percent said it had gone up a little. Only 19 percent said it had gone up a lot.

Does that mean that employees are clueless or complacent? After all, as the survey notes, "these numbers contrast starkly with the actual increases in health-insurance costs over the last two or three years, which have been in the double digits."

The survey's surmise is that employees "may have been insulated from the full brunt of the cost increase." As Richard F. Stolz's story in this issue shows, some employers are indeed going to great lengths not to pass along the big increases.

Those days, as you probably know, are over. According to Hewitt Associates, preliminary 2003 HMO rates are increasing by an average of 22 percent, and some increases range as high as a heart-stopping 94 percent. There's little chance that employers can absorb such increases. Hewitt notes that organizations are altering their plan designs and passing more of the cost along to employees. As Workforce described in its February story "Health-Care Costs: HR's Crisis Has Real Solutions," some employers see salvation in the "consumer-driven" health-care movement, in which employees are more directly exposed to the costs of their benefit choices.

When the NPR/Kaiser/Harvard survey asked people insured through their employers how they felt about switching to a system in which employees would receive a flat fee and decide for themselves how to direct their health-care coverage, they did not cheer: 78 percent said they thought they'd have a harder time getting a good price for health insurance; 75 percent said they thought they'd have a harder time finding or keeping health insurance if they got sick.

In other words, if your company thinks it can easily solve some of its dilemmas by handing employees a check and putting them totally in charge of their health care, it is mistaken. The survey shows that employees don't want to be in the driver's seat on this. Actually, 76 percent of those surveyed believe that employers should be required to offer private health insurance for their employees as a way to expand health-care coverage to more Americans.

There's no question that people are uneasy about the future of their health-care coverage. The survey found that even among those who currently have health insurance, 51 percent are at least somewhat worried that their insurance will become so expensive that they won't be able to afford it. Half are worried that benefits they currently have will be cut back substantially. A third worry they'll lose their coverage.

So when you're talking to employees about these matters, keep their trepidations in mind. They haven't revolted yet, but that doesn't mean they won't.