Health insurance premiums soaring

0 Comments | La Crosse Tribune, Dec 17, 2001 | by Rindfleisch, Terry

Employees will pay more for their health care, health insurance and prescription drugs in 2002, and for some it could be a lot more.

Most health insurance premiums will increase by double-digit percentages next year, and employers will pass more of those costs on to their employees.

"The trend is most employers are taking a close look at what they can offer, and they are passing more of the responsibility on to the employee and the patient," said Steve Kunes, executive director of Health Tradition, Franciscan Skemp Healthcare's HMO.

Kunes said the days of "Cadillac" health insurance plans, in which employers provide 100 percent coverage, are over. He said insurance premiums will rise 10 percent to 20 percent in 2002, depending upon the plan.

Pat Killeen, executive director of Gundersen Lutheran Health Plan, said co-payments and co-deductibles are part of almost all health plans today.

"The trend in the industry nationally and locally is employees are assuming more out-of-pocket expenses," Killeen said. "The cost to the employer is going up, and the employer has to pass it along to the employee. Employers feel a need for their employees to share in the rising costs."

In Wisconsin, employee health care costs increased 12 percent to almost $5,600 a year per employee in 2001, and employers expect that to increase next year, according to a survey of 56 Wisconsin companies with 500 or more employees.

Employers with fewer than 500 employees had an average total cost of $4,649 per employee, an 11.6 percent increase. The figures include costs for all health benefits, including dental coverage.

The survey showed that 40 percent of the employers surveyed were planning to shift costs to employees to offset rising costs of health care.

Killeen said employers are raising the employee's contribution to health care because of rapidly rising costs. He said employers are raising employee co-payments on prescription drugs because of skyrocketing drug costs.

He said employers still value health insurance as an important employee benefit. "Employers are using the health care package for recruiting and retaining their work force," Killeen said.

Most employers in the La Crosse area are still opting for traditional health plans with co-payments and co-deductibles, he said.

Gundersen Lutheran's Senior Preferred, the health plan's Medicare HMO, has grown to more than 5,000 enrollees and has become a financial and patient success, Killeen said. Premiums for Senior Preferred will not increase in 2002, he said.

Kunes said there is a movement toward employers offering employees many plans to choose from with a wide range of premiums, co-payments and co-deductibles. In that case, employers give employees so much money to spend on health care, and they can choose a plan and pay more to upgrade coverage, he said.

"It leaves decisions up to employees, and they quickly see what health care costs are going to be," Kunes said.

Another trend is for health insurance plans to list the type of prescription drugs covered, and then employees have to pay more for drugs not on that list, he said.

Kunes said deductibles for prescription drugs have to go up because drug costs are increasing by about 20 percent.

He said more local employers are changing their employee benefit packages to be more cost-effective. "Employers need to make difficult choices, and they can't always offer the great package," he said.

Some local employers are trying to offer a good health care package even though they cannot give a salary raise, Kunes said.

"Employees and patients are paying more for their health care all the time," Kunes said. "Medical costs are rising, the expectations are higher, and someone has to pay for that."