They giveth; they taketh away
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Highlights of the $1.9T COVID bill nearing final passage
      By the Numbers: Insurers owing largest MLR rebates
      A younger woman provider helping an older woman on a tablet.
      Insurers set sights on growth in Medicare Advantage, Medicaid managed care
      Artist Gus Moran begins his chalk art piece Feb. 28 at the Disneyland Resort Vaccine Super Site POD.
      City of Hope commissions street art to spread positive messages
    • Highlights of the $1.9T COVID bill nearing final passage
      Artist Gus Moran begins his chalk art piece Feb. 28 at the Disneyland Resort Vaccine Super Site POD.
      City of Hope commissions street art to spread positive messages
      The COVID-19 experience and its influence on post-pandemic health policy
      A close-up of President Joe Biden wearing a mask.
      Healthcare industry gearing up to try to find common ground with Biden
    • Shareholder group calls out HCA for alleged excessive emergency department admissions
      Metrologo 600x400_i.jpg
      MetroHealth forms Center for Cancer Research
      The Check Up: Dr. Marc Boom
      The Check Up: Dr. Marc Boom of Houston Methodist
      Dr. Marc Boom
      Q&A: Houston Methodist CEO praises staff efforts to keep vaccine efforts going during ice storm
    • A younger woman provider helping an older woman on a tablet.
      Insurers set sights on growth in Medicare Advantage, Medicaid managed care
      By the Numbers: Insurers owing largest MLR rebates
      5 things to know about Alignment Healthcare's proposed IPO
      Solid sign-ups for Biden's new Obamacare coverage offer
    • MedPAC likely to recommend an effective cut in Medicare Advantage spending
      MedPAC likely to recommend CMS simplify alternative payment models
      Florida governor faces growing charges of vaccine favoritism
      States rapidly expanding vaccine access as supplies surge
    • 369178053.jpg
      Shares of insurer Oscar Health fall following $1.4B IPO
      Sutter Health posts sizable 2020 loss, announces sweeping review of finances
      UPMC's patient volumes stabilize, boosting 2020 profits
      Genomics firms taking advantage of SPACs trend to go public faster
    • Abbott gets emergency use authorization for test that detects COVID-19, other infections
      Insurance regulator to issue warning on virus-test billing
      351532635.jpg
      Red-hot virtual care market propels New York City health startups to record year
      Teladoc reports $383.3M in fourth-quarter revenue, up 145%
    • Artist Gus Moran begins his chalk art piece Feb. 28 at the Disneyland Resort Vaccine Super Site POD.
      City of Hope commissions street art to spread positive messages
      54.2% of teens were fully vaccinated against HPV in 2019, compared with 51.1% in 2018. 79 million: Estimated number of Americans currently infected with HPV.
      Data Points: Another vaccination race for HPV
      Doctors performing surgery
      Doctor appears in court video call while performing surgery
      Diagnostic developers hedge on coronavirus rapid antigen tests, citing conflicting FDA messages
    • Francoise_Adan1_i.jpg
      Cleveland's UH creates position of chief whole health and well-being officer
      Alicia Wilson
      Q&A: Emerging leader Alicia Wilson on staying close to home
      Michael Jordan, Novant team up to address health equity
      Former Ascension CEO, the first to lead the health system, passes away
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • Dr. John Fischer
      Patient-reported outcomes tool for hernia surgery helps physicians improve care
      New care model helps primary-care practices treat obesity
      doctor with patient
      COVID-19 treatment protocol developed in the field helps patients recover
      Rachel Wyatt
      Project to curb pressure injuries in hospitals shows promise
    • What's next for on-demand telehealth companies?
      A CalOptima PACE vaccination clinic.
      Will COVID-19 be the catalyst for creating a more sustainable healthcare system?
      A map of the U.S. with images of the coronavirus.
      The digital divide becomes a new social determinant of health
      Ascension’s St. Mary’s Hospital Surgery Center at Towne Centre and Allegheny Health Network’s Bethel Park surgery center
      Hospitals see opportunity, risk in ambulatory surgery centers
    • Ryan McGinnis
      Finding efficiencies in the OR using tech
      Dr. Daniel Hall
      UPMC pilots machine learning, telehealth to inform patient transfers
      A woman being recorded using her inhaler on a smartphone.
      Digital check-ins, connected inhalers help control asthma
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • What's next for on-demand telehealth companies?
      Rising prescription copays drop adherence, spike mortality, research shows
      Dr. John Fischer
      Patient-reported outcomes tool for hernia surgery helps physicians improve care
      Highmark Health inks six-year cloud, tech deal with Google
    • Ryan McGinnis
      Finding efficiencies in the OR using tech
      Hospitals' Medicare billing practices suggest upcoding, OIG says
      California hospitals prepare ethical protocol to prioritize lifesaving care
      Amazon, JPMorgan Chase, Berkshire Hathaway disband Haven
    • Dr. Daniel Hall
      UPMC pilots machine learning, telehealth to inform patient transfers
      A woman being recorded using her inhaler on a smartphone.
      Digital check-ins, connected inhalers help control asthma
      Humana partners with in-home provider for 24/7 care
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
    • MedPAC likely to recommend CMS simplify alternative payment models
      Bundled payments reduce surgery costs by 10.7%
      Coordinated payment policies could speed transition to value, experts say
      CMMI's geographic direct contracting model needs an overhaul, experts say
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Dr. Alan Kaplan
      The risks, rewards of taking organizations 'where they haven’t gone before'
      Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
    • Dr. Stephen Markovich
      Making sure we're aligned along the path to achieving inclusion
      Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
      John Daniels Jr.
      Health equity: Making the journey from buzzword to reality
    • The COVID-19 experience and its influence on post-pandemic health policy
      Haven is history, but its mission is the future of healthcare
      Vaccinating children could be the key to ending the pandemic
      Mikelle Moore
      The promising future of rural healthcare, even amid the COVID-19 pandemic
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Best Places to Work in Healthcare Logo for Navigation
      Nominations Open - Best Places to Work in Healthcare
      Nominations Open - 50 Most Influential Clinical Executives
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Minorities in Healthcare
      • - Luminaries
      • - Top 25 Minority Leaders
      • - Minorities to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • podium march webinar logo lockup
      Sponsored Content Provided By Podium
      Webinar: Critical Touchpoints for Every Patient’s Journey — How Technology Plays an Important Role
      scp health logo lockup march 2021
      Sponsored Content Provided By SCP Health
      Webinar: COVID’s call to action — Reset for success in 2021
    • Women Leaders in Healthcare Conference
    • Social Determinants of Health Symposium
    • Healthcare Transformation Summit
    • Leadership Symposium
    • Virtual Briefings
      • - Hospital of the Future
      • - Mental Health
      • - Patient Safety & Quality
      • - Strategic Marketing
      • - Virtual Health
      • - Workplace of the Future
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Empty boardroom
      Next Up Podcast: What's going to happen tomorrow? Succession planning during emergencies
      Next Up Podcast: Educating patients on the COVID-19 vaccine with Tanya Andreadis
      Dr. Joseph Cacchione
      Next Up Podcast: Educating patients on the COVID-19 vaccine with Dr. Joseph Cacchione
      Dr. Karen DeSalvo
      Next Up Podcast: What to expect with telehealth and healthcare technology in the next four years
    • Beyond the Byline: Insurers are betting on virtual-first plans as COVID-19 shifts care pathways
      Beyond the Byline: How residents' stories shape our coverage of the vaccination rollout in nursing homes
      Beyond the Byline: Regulators aim to boost value push with fraud and abuse law updates
      An older man wearing a mask receiving a vaccine.
      Beyond the Byline: Verifying information on the chaotic COVID-19 vaccine rollout
    • Outreach during COVID-19
      Leading intention promote diversity and inclusion
      Introducing Healthcare Insider Podcast
    • The Check Up: Dr. Marc Boom
      The Check Up: Dr. Marc Boom of Houston Methodist
      The Check Up: Dr. Imran Andrabi
      The Check Up: Dr. Imran Andrabi of ThedaCare
      The Check Up: Tanya Blackmon
      The Check Up: Tanya Blackmon of Novant Health
      The Check Up: Dr. Patrick Hwu
      The Check Up: Dr. Patrick Hwu of the Moffitt Cancer Center
    • ivana naeymi-rad one on one intelligent medical objects
      Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
September 06, 2010 01:00 AM

They giveth; they taketh away

At a time when the government is offering firms money for health costs, a new survey reveals workers are being called on to pay more for insurance

Rebecca Vesely
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Workers are shouldering more of the costs of health coverage than ever before amid stagnant wages and a weak economy, according to a benchmark survey of employers released last week.

    And yet, the Obama administration is quickly rolling out programs that aim to shore up employee benefits as mandated in the health reform law. Many employers are eager to participate.

    Experts said that while it is still unclear how successful these federal programs will be, employers and workers need to be more engaged in cost-control tactics.

    “We're finding that employers are not holding health plans accountable,” said Megan McHugh, research director of the Health Research & Educational Trust, a division of the American Hospital Association.

    This is bad news for workers, according to the 12th annual survey by the Kaiser Family Foundation and the HRET, released last week.

    The survey of more than 3,000 employers large and small showed that firms are increasingly passing on the cost of care to workers. This year, the total cost of premiums—both the worker and employer share—rose by 3% to 5%. But the workers' share of cost rose by 14%, while the amount employers contributed did not increase (See chart, p. 7).

    The average premium cost for family coverage this year was $13,700, with workers picking up nearly $4,000 of the cost, up close to $500 since last year. Employers contributed on average $9,770 toward family premiums in 2010, about the same as last year, the survey found.

    Over the past five years, workers' contributions to premiums have risen by 47%, while overall premiums rose 27%, wages increased 18% and inflation rose 12%, the survey concluded.

    “It's the first time that I can remember seeing employers shifting all the costs to workers,” said Drew Altman, president and CEO of the Kaiser Family Foundation. “It speaks to the depths of the recession and holding the line on costs while trying to avoid layoffs.”

    Perhaps more important is the long-term trends seen in the annual survey, Altman said.

    “For working people, they are getting less while paying more,” he said.

    Take annual deductibles. More than a quarter of workers—27%—have annual deductibles of at least $1,000, up from 22% of workers a year ago. Among firms with fewer than 200 workers, 46% had an annual deductible of $1,000 or more. The share of workers with annual deductibles of $2,000 or more is also rising, according to the survey. The continued shifting of healthcare costs to employees comes as hospitals struggle to contain the amount of patient bad debt on their books. The American Hospital Association has estimated that about a quarter of hospital bad debt comes from underinsured patients who can't afford copayments and deductibles (Aug. 23, p. 14).

    “The nature of health insurance in this country is changing,” Altman said. “People are having problems paying for care; we know this from other studies. This is a very important issue that did not get enough attention during” the health reform debate.

    Help for employers

    The Obama administration is keeping the spotlight on new programs in the health reform law that aim to help employers cover their workers.

    Last week, HHS Secretary Kathleen Sebelius appeared on stage in Washington to announce the first 2,000 businesses and unions accepted into the Early Retiree Reinsurance Program. Flanked by employers and union officials, Sebelius said that rising healthcare costs put employers at a disadvantage against foreign competitors.

    In response, the $5 billion reinsurance program will shore up a declining benefit. Today, only 29% of employers offer health coverage to early retirees who do not yet qualify for Medicare. That's down from 66% in 1988, according to HHS.

    To qualify, employers and unions must already offer health benefits to retirees between the ages of 55 and 65, spouses and dependents. HHS will reimburse the employers 80% of medical cost claims for individuals who have medical expenses between $15,000 and $90,000 a year. The program ends in 2014 when early retirees will be able to purchase health coverage through new insurance exchanges and cannot be denied coverage based on a pre-existing condition.

    Ceramic and glass company Corning spent $60 million last year on retiree health coverage, said Debra Waggoner, director of global government affairs for the New York-based company. Corning pays 75% of the share of coverage, while retirees pay 25%, she said.

    “Being competitive in today's global economy is difficult with rising healthcare costs,” Waggoner said. “But healthcare is a fundamental part of our commitment to our employees.”

    There's so much enthusiasm for this reinsurance program that experts say the $5 billion allocated will run out well ahead of 2014. The Employee Benefits Research Institute predicts that $2.5 billion will be exhausted in the first year of the program because of the high demand from employers and high claims from early retirees. By the end of the second year, the funds will be exhausted, the institute said.

    Sebelius said she would monitor the funds and provide regular updates on the program.

    Despite enthusiasm for this program—even among the law's detractors (See story, p. 7)—the health reform law remains unpopular. A monthly tracking poll, also by the Kaiser Family Foundation, indicates the law is actually growing more unpopular. The law had a 43% favorability rating in August, down from 50% in July, according to the study.

    Sebelius said at a news conference announcing the reinsurance program that she was aware of the trending. “What is really important to a lot of folks is how this will affect” them, she said. “We are getting that message out a step at a time.”

    She pointed to the small business tax credit in the law as an example. “Small businesses are operating with apprehension about the law,” Sebelius said. “Often they have not heard about the tax credit. They think it's a mandate.”

    Millions of employees at small businesses could benefit from the tax credit in the law, according to another report out last week, by the Commonwealth Fund. The tax credits will offset up to 50% of the cost of health premiums for workers at firms with up to 25 employees. About 16.6 million workers will be eligible starting this taxable year, and about 3.4 million workers will benefit by 2013, according to the report. Small employers could lower their premiums by 8% to 11% by 2016 when the credits sunset, the report states. The savings per employee could be about $2,000.

    “It's real money,” said Karen Davis, president of the Commonwealth Fund.

    Like the retiree health reinsurance program, the tax credit won't likely add to the ranks of the insured. Rather, it will shore up existing benefits at small firms, Davis said. “It is really an economic stimulus measure that will help small businesses get through these tough economic times,” she said.

    Small businesses are cost-shifting even more than large ones, according to the Kaiser Family Foundation survey. Twenty percent of workers at firms with fewer than 200 workers have an annual deductible of $2,000 or higher, up from 16% of small-businesses workers last year, the survey found.

    Lack of engagement is a core issue, McHugh said. Only 5% of small firms surveyed said they review performance indicators for their health plan's service or clinical quality. Among large firms, 34% said they were likely to review health plan performance.

    At the same time, only 16% of large and small businesses said they include a high-performance or tiered provider network in their health plans. These networks encourage patients to visit the most efficient doctors by either restricting payments or offering copayments and coinsurance for providers in different tiers.

    McHugh of the HRET called this lack of comparison shopping “troubling.”

    But Andrew Webber, president of the National Business Coalition on Health, an employer group focused on improving health system performance, said he was encouraged by these findings. “I don't think it's realistic for small employers to be aware that this information is even available,” Webber said.

    But among firms that did use this data, including the 34% of large firms, a total of half said that performance measures were very or somewhat influential in helping them select a health plan. “I see that as a positive, and it's certainly higher than in the past,” Webber said. “If you've got a small percentage of the customer base really pushing for changes, it can have an impact across the board.”

    Others agreed that the news from last week was not all gloom and doom. Jim Napoli, an employment benefits lawyer and senior counsel at Proskauer Rose in Washington, said more cost-sharing isn't always a bad thing. If cost sharing means giving workers more decisionmaking in their healthcare purchasing, that's a trend that is unrelated to the recession, he said. “Generally speaking, it's not a movement where employers are trying to walk away from their obligation,” he said. “They are trying to get the employees more engaged.”

    Indeed, consumer-driven plans now enroll 13% of total covered workers, up from 8% last year. And about three-fourths of employees that offer health coverage have wellness programs today, including those for weight loss, smoking cessation and personal health coaching, according to the Kaiser Family Foundation survey.

    Napoli concedes that too much cost sharing can be detrimental because it becomes a barrier to access care. “It's a delicate balance,” he said. “And it's very much a discussion going among employers when designing benefits for 2011.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Insurers set sights on growth in Medicare Advantage, Medicaid managed care
    Insurers set sights on growth in Medicare Advantage, Medicaid managed care
    By the Numbers: Insurers owing largest MLR rebates
    By the Numbers: Insurers owing largest MLR rebates
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Minorities in Healthcare
          • - Luminaries
          • - Top 25 Minority Leaders
          • - Minorities to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Women Leaders in Healthcare Conference
        • Social Determinants of Health Symposium
        • Healthcare Transformation Summit
        • Leadership Symposium
        • Virtual Briefings
          • - Hospital of the Future
          • - Mental Health
          • - Patient Safety & Quality
          • - Strategic Marketing
          • - Virtual Health
          • - Workplace of the Future
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing