A new report that says health insurance premiums are rising at a double-digit rate is old hat to hospitals, which are feeling the spillover by treating larger numbers of uninsured people.
"This is not unexpected news," said Charles Pierce, president of the Florida Hospital Association in Orlando. Hospital emergency rooms likely will feel the brunt of the impact, he said, as rising numbers of uninsured patients make unpaid ER visits more common.
Rising premiums and a slowing economy are prompting fewer employers to pay the full cost of their workers' health insurance, according to a report released last week by the Henry J. Kaiser Family Foundation. Monthly premiums for employer-provided health insurance increased 11% between the spring of 2000 and the spring of 2001, up from an 8.3% increase last year and a 4.8% increase in 1999, said the report, which appears in the September/October issue of Health Affairs.
Premium increases last year represented the largest jump in costs since 1992, the report said.
The percentage of employers providing coverage remained flat after two years of growth, according to the report, which is based on a survey of 2,734 employers whose workforces range in size from three to 300,000 employees.
"As the economy cools off and premiums shoot up, workers should expect health insurance to be less available, less comprehensive and more expensive," said Larry Levitt, vice president of the Kaiser Family Foundation and a co-author of the study.
According to the survey, more than four in 10 employers are "somewhat likely" or "very likely" to increase their workers' share of health costs next year to offset the effects of a troubled economy and heftier insurance premiums.
Rising costs "affect health plans' ability to offer a wide range of products to meet their customer needs," said Phil Blando, a spokesman for the American Association of Health Plans in Washington. The Kaiser survey, he said, "should be a clear warning to Congress that as they talk about expanded liability (through a patients' bill of rights), they're doing so in an environment where costs are rising in the double digits."
A majority of employers surveyed-64%-pointed to prescription drug spending as a major factor driving premium increases. Respondents also cited the growing cost of hospital and physician care, as well as higher insurance industry profits, better but more expensive medical technology and richer employee benefit packages.
Of all plan types, the survey found, HMOs are the least costly and fee-for-service plans the most costly.
Despite predictions that employers would move to a "defined contribution" model of insurance coverage-which enables employees to use company-provided funds to purchase their own insurance-just 13% of large companies and 24% of small ones said they are "very likely" or "somewhat likely" to change to such a model in the next five years.
"This year's survey does not show a significant reduction in the offering of health insurance or a dramatic shift toward increased employee cost sharing, but it does indicate that recent improvements in these measures have stalled," survey authors concluded.