A painstaking balance

By SUSAN ASCHOFF

© St. Petersburg Times,
published November 6, 2001

In a precarious financial equilibrium, rising health care costs force employers weighing methods to keep health insurance plans workable to pare benefits and pass along added costs to workers.

Double-digit hikes in health care costs for 2002 are again forcing many companies in the Tampa Bay area to seek new insurers and reassess the benefits they provide.

Some dropped prescription coverage. Others curtailed visits to doctors outside their plan.

After six years of "holding the line" on what employees pay, Alabama-based AmSouth Bank will pass along a third of next year's $6-million increase to its employees, it announced in its newsletter. Nationally, more than 85 percent of large businesses are sharing cost hikes with workers.

Both employers and employees are examining endless variations in the ways health coverage plans are structured to keep costs under control.

"There's not a silver bullet out there. It's very difficult to know how to navigate now," says Dorie Ramey, benefits consultant for Hewitt Associates.

Some workers sorting through forms say they are grateful they have health care coverage at all.

"I don't see it getting any easier. Our company tries to get us a good deal -- they work very hard for us. But it's expensive. It's an arm and a leg," says Alice Nichols, a production group leader at Interconnect Cable Technologies Corp. in Brooksville.

Nichols cobbled together coverage for her family, buying insurance for herself through work, enrolling her teenage son in a plan offered by the schools and intending to sign up her husband in the future after he goes off worker's compensation for an injury.

Many of the people she supervises, who make cable assemblies, "fall into the cracks," she says.

"They don't qualify for Medicaid, but they don't make enough for insurance," says Nichols. "You struggle for them."

"This year it was pretty dramatic," says Interconnect president Randy Sevald. "The average increase was 77 percent if we wanted to renew our policy."

Companies across the country are typically seeing 13 to 16 percent increases in health care costs for 2002, the fourth successive year of significant hikes and the largest jump since the early 1990s, reports Hewitt Associates, a global management firm and the largest benefits consultant in the United States.

More than 80 percent of large companies are planning to pass along some of the costs to employees -- an additional $185 to $460 a year, statistics show.

At Interconnect, line workers are paid above minimum wage but often cannot afford about $100 a week for family coverage, says Sevald. The company switched from Blue Cross Blue Shield to United Health Care and excluded dental and prescription coverage to contain costs.

"We struggle to get half the people in the program" even under the new plan, he says.

Christina Salgado, a 19-year-old assembler at Interconnect, says she cannot afford the approximately $80 a month for individual coverage. "I know I need insurance," says Salgado, "but it seemed expensive to me."

Higher prices, while painful, may be the most straightforward news in those mailbox packets. Companies are shifting the complicated choices about level of care to employees, a trend which is expected to continue. Large businesses may offer two or three medical plans, from HMO to PPO, optional dental and eye care, sliding deductibles and three-tiered prescription plans with different prices for brand name, generic and formulary drugs -- those made by companies who then make deals with plan providers for discounted prices.

As much as 80 percent of next year's hike in insurance premiums is attributed by analysts to prescription costs.

Other factors in the increase are an aging population, which uses more health care services, and consumers' unwillingness to accept fewer of the medical attention and technologies they want for prevention and treatment.

"We are seeing a shift because consumers are so far separated from what health care costs. Some think it costs $15 to have a baby because that's what they pay," says Hewitt's Ramey.

"One of the biggest barriers (to making consumers choose) is that employees don't have the time, energy and knowledge to figure things out."

This year many with insurance suffered disruptions in care because doctors and hospitals pulled out of some networks. Picking the right new plan becomes especially important, says Hewitt. (See "An Rx for picking a health plan," Page 4D.)

Jacqueline Morris, executive director of the Greater Hernando County Chamber of Commerce, has a "2-foot stack of proposals and booklets" on various plans on her desk.When two of the area's carriers pulled out, more than 100 of the chamber's member businesses were forced to shop for new coverage, she says.

If workers were forced to find individual coverage, as many as 60 percent would be uninsurable because of pre-existing conditions and other factors, says Don Burgher, an agent with Insurance Brokers of Central Florida.

Those with more choices will need to be smarter, advises Hewitt Associates: "Ask yourself: Are you choosing the right medical coverage for you and your family? What about income protection (disability, life insurance and long-term care)?"

Bay Care Health System, the corporate parent for Morton Plant Mease Health Care in Clearwater and eight other hospitals in west-central Florida, decided to increase its health care spending next year by more than $5-million. Surveyed employees consistently rank the benefit as most important behind salary, says Lara Bilchak, Bay Care benefits director.

The company tightened its dental plan, simplified referrals and reduced plan options from four choices to two to cut costs for its 15,000-member workforce, Bilchak says.

"It's always a difficult time when you have to roll out changes. I took my mother out to dinner, and she handed me a packet. She needed help with her (Medicare) prescription coverage."

But no matter how daunting the choices, health care consumers must dig into those packets.

"The more people understand how it works and what it costs," says Bilchak, "the better it is."

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