Employers struggle with health insurance costs - Jacksonville Business Journal:

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billion doctor’s bill, and industry leaders say it’s causing healtu insurance plans to increase deductibles and chip away at benefitto compensate. That’s because when Medicaid and Medicare reimburse healtgh care providers at a lower rate thanprivate insurers, some hospitalds and doctors shift the cost to commerciaol payers rather than absorb it. This type of sometimes calleda “hidden tax,” is estimated to have increasef hospital and physician costs for privately insured patient by 15 percent, according to , a Seattle-based consultin g firm. Milliman has just released a study commissioneed bythe , the and two additionalk health care companies.
It founds that cost-shifting annually adds an estimated $1,512, or 10.6 percent, to the averagr premium for a familyof four. Scott Serota, president and CEO of Chicago-base d Blue Cross and Blue Shield, said cost-shifting shoulds be an area of focus in the upcomint comprehensive health care reform expected in the new administrationundetr President-elect Barack Obama. Employers absorb the brungt ofskyrocketing costs, paying nearly three-quarterw of the shift, according to Milliman.
But if they haven’t already, more employers plan to pass costs on to their The Milliman study comes on the heelas of a national survey to evaluate the health care plan s ofnearly 2,900 employers, releasef in late November by Spokane, Wash.-based . It founf that employers held net healthb benefit cost increases at about 6 percentf in the current year for a fourtystraight year, but that has meant shifting more cost to Employers are evaluating all options. One-thirdf of Florida employers plan toincrease co-payments and out-of-pocket expenses to mitigate rising according to the Mercer surveu of 105 Florida-based employers.
Thirty-one percentt will increase employees’ share of the premiumm contribution and 20 percent will increasemployee cost-sharing in some other way. That’s on top of healthu plan deductibles that doubled last year tomake $1,000 deductiblea the norm among U.S. workers. In 2000, about half of employerzs imposed a deductibleat all, and when they did, the mediab amount was just $250, according to “Employees are in no betted position to pay those increases,” said Janice executive director of the Small Business Development Center at the University of North Florida.
“That’ws a hard sell as an employer to say, I know you haven’t had a raise this year, but insuranc rates are going up.’ ” Jackis Perry, executive director of , said some Jacksonvillre businesses have discontinued coverage tostay afloat, and a few have addef a retirement savings account or increased sick and vacationh pay to compensate for little or no healtb insurance coverage. The study did not account for businesses with fewee than10 employees.
More than half of all employersd in Duval County have fewer than five Mercer respondents estimated that if they did not make changes totheir plan, cost would rise by about 9 Changes to plan design and/or plan vendorsd were expected to lower their cost increasd to 6.4 percent.