Great minds think alike (re health care costs and strikes)

Here’s what it says about health care costs in a Q & A I just got in an e-mail newsletter from Workforce Management Magazine (sign up here)

Q. “Last year, there was a 40 percent increase in the health care premiums at my company. The company picked up 75 percent of the total cost, which amounted to a significant increase in benefits for those covered under the company health insurance plan. What are employers about rising health costs–especially since some people use more health care, and some use less. Should those who use less be rewarded?”

A. ‘[E]mployers have begun introducing consumerism and consumer-driven plans that also can be viewed as an attempt at equitable distribution of health care dollars. In one model, the employer allocates a specific dollar amount to a Health Reimbursement Arrangement (HRA) for each covered person (perhaps $1,000). The account is used to reimburse the first $1,000 of medical expenses before a “high” deductible kicks in and a traditional medical plan is layered on top. For big users of medical care, the account balance will be zero at the end of the year. For low users, accounts may be used to reimburse over-the-counter drugs, dental, vision or other qualified expenses, or the person may roll the balance to accumulate in future years.”

“Perhaps a hybrid approach would have the employer offering more than one high deductible option as part of a consumer-driven health offering (perhaps $1,500 and $3,000). People who don’t use medical care as much would be able to buy into the $3,000 deductible option at a lower contribution rate.”

“Regardless of what form they take, health plan designs that promote consumerism, make employees more aware of costs, and foster equitable treatment of all employees will play a growing role in employers’ health care cost management efforts.”

SOURCE: Elizabeth A. Dudek, Vice President, The Segal Company, Washington, D.C.

Also see this on labor strife and health care costs: “More workers strike over healthcare benefits” (Christian Science Monitor).

“Though coincidental in timing, the [California grocery and transit] strikes aren’t unrelated. Both unions are trying to renegotiate contracts that will boost medical benefits and cover soaring health-insurance costs. The two high-profile strikes follow dozens of recent union disputes in California and elsewhere over health benefits, an issue that may continue to plague contract negotiations coast-to-coast until the larger issue of health costs is addressed.”

” ‘We have a healthcare crisis in this country and that has spilled over into every union bargaining negotiation in the country,’ says Kate Bronfenbrenner, director of Labor Education Research at Cornell University. ‘Employers are feeling the pressure to cut costs and unions are trying to hold firm not just on behalf of organized workers but unorganized ones as well.’ ”

“Some experts say such disagreements between unions and employers cannot be solved from strike to strike, workplace to workplace. The healthcare issue is taking on a national prominence and may loom large in the 2004 presidential election.”

” ‘The fight over health benefits in union contracts across the country is the biggest cry yet for a larger look at legislative change at the national level,’ says Professor Bronfenbrenner of Cornell.”

Compare my comments yesterday on healthcare and here regarding the strikes.

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