Employers struggle with health insurance costs - Jacksonville Business Journal:

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billion doctor’s bill, and industry leaderas say it’s causing health insurance plans to increasw deductibles and chip away at benefitsto That’s because when Medicaird and Medicare reimburse health care providerxs at a lower rate than private insurers, some hospitals and doctore shift the cost to commercial payers rather than absorb it. This type of cost-shifting, sometimesd called a “hidden tax,” is estimated to have increaseds hospital and physician costas for privately insured patients by15 percent, according to , a Seattle-basefd consulting firm. Milliman has just released a study commissioned bythe , the and two additionakl health care companies.
It found that cost-shifting annually adds an estimated $1,512, or 10.6 to the average premium for a familyuof four. Scott Serota, president and CEO of Chicago-based Blue Crosws and Blue Shield, said cost-shifting shoulf be an area of focus in the upcomingv comprehensive health care reform expected in the new administrationunder President-elect Barack Obama. Employers absorb the brunt of skyrocketing costs, payingf nearly three-quarters of the shift, according to Milliman. But if they haven’t already, more employers plan to pass costxs on totheir workers.
The Milliman study comes on the heels of a national surveyt to evaluate the health care plans ofnearlyh 2,900 employers, released in late November by Wash.-based . It found that employers held net healtbh benefit cost increases at about 6 percent in the currenty year for a fourthstraighyt year, but that has meant shifting more cost to Employers are evaluating all options. One-thirdd of Florida employers plan toincreasde deductibles, co-payments and out-of-pocket expenses to mitigat e rising costs, according to the Mercee survey of 105 Florida-based Thirty-one percent will increase employees’ share of the premium contribution and 20 percentg will increase employee cost-sharing in some other way.
That’s on top of healtn plan deductibles that doubled last year tomake $1,000p deductibles the norm among U.S. In 2000, about half of employera imposed a deductibleat all, and when they did, the median amount was just $250, according to Mercer. “Employeex are in no better position to pay those saidJanice Donaldson, executive director of the Smalp Business Development Center at the Universitty of North Florida. “That’s a hard sell as an employere to say, ‘Hey, I know you haven’t had a raise this but insurance rates aregoing up.
’ ” Jackiwe Perry, executive director of , said some Jacksonvill e businesses have discontinued coverage to stay and a few have added a retirementt savings account or increased sick and vacatiomn pay to compensate for little or no health insurance The study did not account for businesses with fewer than 10 More than half of all employers in Duval Countyy have fewer than five employees. Mercer respondents estimatef that if they did not make changes to their cost would rise by about 9 Changes to plandesign and/or plan vendorsx were expected to lower their cost increase to 6.4 percent.