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Like most of my co-workers, I was not thrilled when the premiums for my company-supplied health insurance jumped, yet again, in 2003.
Not that it mattered. This year, some of the same doctors who had agreed to provide their services at my HMO's reimbursement rate with a $20 copayment started sending followup bills. "You owe us $5," the bills typically say, in effect nickel-and-diming my copay up to $25 per visit.
Then my own physician recently sent me a form letter saying my HMO didn't pay enough to allow him to keep me as a patient. See ya, the doctor said.
Now comes this week's 2004 health care cost survey from the benefits gurus at Towers Perrin. An early peek at U.S. businesses shows the size of the average increase for 2004 in health care costs - 11 percent - is expected to be less than the 15 percent increase in 2003.
Hardly news to cheer. This will be the fifth year in a row of double-digit hikes in health insurance costs.
"I cannot recall a longer sustained period of double-digit increases in the health care industry," says Jim Foreman, Towers Perrin's managing director of health and welfare. (See table.)
Overall, the 2004 average increase in U.S. corporations' health care costs amounts to $742 per employee.
For an employee with individual coverage, the average total cost of medical coverage next year is expected to be $314 per month ($3,768 annually). Of that, an employee will contribute an average of $59 a month in 2004, compared to $48 a month in 2003 and $38 a month in 2002.
For employee-plus-one-dependent coverage, the average price in 2004 rises to $627 per month ($7,524 annually). And for an employee paying for coverage of his or her entire family, the cost will increase to $888 per month ($10,656 annually). That translates to the employee paying an additional $36 a month, raising his portion of the monthly $888 bill to $196.
While employees continue to be asked to pay more out-of-pocket for their health care in 2004, employers still shoulder the bulk of the costs. Towers Perrin says employees will contribute 19 percent of the total cost for employee-only coverage and 22 percent for family coverage. Those are about the same percentages as they paid in 2003.
Bottom line? Companies are paying twice as much in health care costs today as they paid six years ago.
In Tampa, Towers Perrin principal Don Gaias says some companies are taking more aggressive steps to control health care costs. Some are starting to offer employees a broader choice of coverage and costs. For example, one retail company in the Tampa Bay area is expected to soon offer its employees a health reimbursement account. The employee would set aside each year a sum from his or her paycheck - typically between $500 and $1,000 - and would tap that money first to pay for medical expenses before insured coverage would kick in.
The idea, says Gaias, is to make employees more accountable for their medical spending. Funds not used in one year could be carried over and accumulated in the next year.
"When there is just one plan for everybody, the healthy people subsidize the sicker people," he says. That idea worked well in companies, at least until the costs started to pinch both employers and employees.
Now companies are taking a fresh look at limits to health coverage, capping or segregating the costs of employees who have long-term or high-cost illnesses, and fighting harder with HMOs for better rates.
That scenario was explored Tuesday in a Wall Street Journal story about retail behemoth Wal-Mart's efforts to control health care costs. New Wal-Mart employees do not get health coverage for the first six months on the job. Pre-existing conditions often are not covered in the first year. Health plan deductibles can be as high as $1,000, or three times the norm.
But Wal-Mart, whose per-employee health care costs are well below those of most companies, manages to offer health services others cannot or will not. Though the company raised premiums 50 percent in the past two years, an employee can still join and get coverage for only $13 every two weeks. Wal-Mart also pays for catastrophic coverage such as long-term cancer treatment, usually covering 100 percent of expenses above $1,750 a year in out-of-pocket expenses. The company also paid for 300 organ transplants in the past five years at a price tag of more than $1-million apiece.
On the other hand, another Journal story describes the rising necessity of companies that self-insure (pay for their own employees' medical bills) to separately negotiate coverage of its sickest employees with insurance companies. The story calls this practice lasering, or carving out and separating coverage of those most ill.
The idea is that removing the sickest employees from a large pool of employees will reduce the premiums for the vast majority of workers. Separate policies are negotiated for the sickest employees, usually involving extremely high deductibles or, sometimes, caps on the amount of expenses that will be paid.
As Third World in quality and high in price as health coverage seems at times, at least I have some. That's not the case with 15.2 percent of the U.S. population.
The uninsured increased last year by 2.4-million, almost 6 percent, to an astonishing 43.6-million Americans, according to data released this week by the U.S. Census Bureau. In Florida alone, 2.8-million residents lack health insurance. That's 17.4 percent of the population, eighth highest among U.S. states.
Many of the nation's 2.4-million folks lost health insurance when they lost their jobs.
Among those 2.4-million uninsured are whites, blacks, people 18-to-64, and middle- and higher-income earners.
Some of those 2.4-million dropped their available coverage when it just got too expensive.
And some of those 2.4-million lost their coverage, but not their jobs, when the small businesses they work for decided that offering coverage was no longer worth the expense.
The trends look nasty. If they continue, how long will it take before we see some version of this office memo?
As of January 1, employees are hereby prohibited from contracting any disease or sustaining any accident. Those who cannot abide by these rules, or agree to be healed with an aspirin and a BandAid, will be terminated. Have a nice day!
- Robert Trigaux can be reached at trigaux@sptimes.com or 727 893-8405.