What's the Healthcare Buzz these days?

The major buzz in the healthcare arena over the past several years was focused on high-deductible health plans. Lately we’ve seen more focus on creative plan designs where you can identify financial incentives to increase compliance, encourage high-value care and discourage the use of unproven or poor services. The basic concept is to identify your cost issues and design a plan that allows you to manage the high cost diseases in your specific group. This is being achieved by lowering the costs for the employees who take care of themselves.

We see some companies providing incentive programs for their employees. One of our clients has a wellness program that allows those participating to accumulate points for accomplishing and maintaining certain health goals. They can use these points to purchase gift items of their choice including flat screen TVs, vacations, etc. They reward those employees who are practicing better health habits, resulting in lower healthcare costs. It’s a “win-win” situation.

Healthcare doesn’t have a one size fits all solution. That’s why you need to work with an experienced healthcare professional who can customize a program that works for your specific group. Dell Kubler at Swerdlin Benefits Company would be happy to discuss how we can help you come up with solutions for your company.

The Costs: A Yearly Survey

Every year, the Kaiser Family Foundation and the Health Research and Education Trust conduct an employer health benefits survey. The 2007 survey included 3,078 randomly selected public and private firms with three or more employees.

2007 was the fourth consecutive year a lower rate of growth of health insurance premiums were experienced (6.1%). However, the rate is still far above inflation and the growth of worker’s wages.

The average annual total premium cost is $4,479 for single coverage and $12,106 for family coverage. Is your company in-line with the average?

Other key findings from the 2007 survey include:

• The percentage of employers sponsoring insurance remains stable, with no significant increase in the percentage of employers offering high-deductible health plans with a savings option.
• About 80% of workers with single coverage and 94% of workers with family coverage contribute to the total premium for their coverage. The average annual worker contributions for single and family coverage are $694 and $3,281, respectively, and are significantly higher than the amounts reported in 2006.
• The majority (57%) of covered workers are enrolled in preferred provider organizations (PPOs). Health maintenance organizations (HMOs) cover 21%, followed by point-of-service (POS) plans (13%), HDHP/SOs (5%), and conventional plans (3%).
• In PPOs, 71% of covered workers with single coverage have a general annual deductible that they pay before coverage for most services begins. Almost half (48%) of workers in POS plans and about 18% of workers in HMOs face a general annual deductible for single coverage. Many workers with no deductible have other forms of cost sharing for office visits or other services.
• The average general annual deductibles (for workers with a deductible) for single coverage are $461 for workers in PPOs, $401 for workers in HMOs, $621 for workers in POS plans, and $1,729 for workers in HDHP/SOs (who by definition have high deductibles).
• The majority of workers have copayments or coinsurance for physician office visits. Among the 79% of workers with copayments for in-network office visits, 75% have a copayment of $15, $20, or $25 per visit with a primary care physician.
• Most covered workers face copayments or coinsurance for prescription drugs. About three in four covered workers are in plans with three or four-tier cost-sharing arrangements, and most face copayments rather than coinsurance for the first three tiers. The average copayments are $11 for generic drugs, $25 for preferred drugs, and $43 for nonpreferred drugs. The average copayment for fourth-tier drugs is $71 and the average coinsurance is 36%.
• Sixty percent of employers offer health benefits in 2007, similar to the 61% offer rate reported in 2006 but lower than the 69% offer rate in 2000. The drop in the overall offer rate is driven by the declining percentage of small firms (3–199 workers) that offer coverage. Among firms with 3 to 9 workers, the offer rate has dropped from 57% in 2000 to 45% in 2007.
• Sixty-one percent of firms that offer health benefits allow employees to use pre-tax dollars to pay for health insurance premiums.
• A smaller percentage (22%) of offering firms offer a flexible spending account.
• A large percentages of firms report they are very or somewhat likely to increase the amount workers contribute to premiums (45%), increase deductible amounts (37%), increase office visit cost sharing (42%), or increase the amount that employees have to pay for prescription drugs (41%) in the next year.
• One-fifth of firms report being somewhat likely (18%) or very likely (2%) to offer an HSA-qualified HDHP in the next year, and almost one-quarter report being somewhat likely (21%) or very likely (3%) to offer an HDHP/HRA in the next year.