NCPA - National Center for Policy Analysis

Higher Health Premiums Await Workers, Survey Says

August 20, 2010

A survey of big employers finds they expect their health care costs to rise nearly 9 percent next year and plan to share some of that burden with employees via higher premiums and higher out-of-pocket limits.  

The survey included responses from 72 members of the nonprofit National Business Group on Health, which represents large companies such as General Electric, Microsoft and General Motors.  

Highlights from the report: 

  • Next year, 63 percent of employers who responded said they'll increase the proportion of insurance premiums paid by their employees; some 46 percent plan to raise the limit on annual out-of-pocket payments; 44 percent plan to raise deductibles for in-network services.
  • So called consumer-directed health plans, such as a high-deductible plan with a health savings account, are one of the tactics employers are using to control costs; 61 percent plan to offer a consumer-directed plan in 2011.
  • As far as controlling drug costs goes, employers report using prior authorization (73 percent), step therapy (63 percent), a tiered system (63 percent) and required mail order for maintenance meds (47 percent).
  • Most employers plan to change their plans to comply with provisions of the health care overhaul law, including removing lifetime limits on benefits. 

The majority of respondents (56 percent) counted wellness programs as one of the top three ways to curb costs (cost sharing and consumer-directed plans also made the list).  Another cost-saving measure, the dependent eligibility audit, is lower down on the list. 

On the retiree health benefit front, employers said they were trying to keep a lid on costs via caps on company contributions (46 percent), boosting employee contributions (37 percent) and eliminating coverage for future retirees (33 percent). 

Source: Katherine Hobson, "Big Employers Estimate Health Care Costs Will Rise 8.9 percent in 2011," Wall Street Journal Health Blog, August 19, 2010. 

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