Survey on employer health care costs and trends

The Wall Street Journal’s Marketplace section today, in an article by Vanessa Fuhrmans entitled “Shifting Burden Helps Employers Cut Health Costs,” summarizes the results of the latest study on the subject by Mercer Human Resources Consulting, the press release version of which is found here.

Interesting press release, with some helpful charts and graphs. Some points I found interesting:

“Employee contributions, especially for family coverage, rose sharply in 2003. Over the past three years, many employers had shielded employees from steep health plan rate hikes by passing on only a portion of the increase. While the dollar amount deducted from employees’ paychecks rose, their share of cost as a percent of premium actually fell from 1999 to 2002.

In 2003, employers took back the lost ground. . . . In HMOs, the average employee-only contribution rose from 31% of premium (or the premium equivalent) to 35%, and the family contribution rose from 50% to 57%. In PPOs, the family contribution jumped from 53% to 58%. With pay increasing by only about 3% on average, for some employees higher premium contributions wiped out increases in total compensation.”

“If employers are to beat the 13% increase predicted for 2004, another wave of cost-shifting will be required.”

“Over a third of all employers (39%) say that “promoting health care consumerism,” defined as informed and responsible health care spending by employees, is part of their health benefit strategy. At the far end of the consumerism spectrum are account-based consumer-directed health plans (CDHPs), under which employees spend money from their own employer-funded account to pay for routine health care expenses, but are covered for serious illness or injury by a high-deductible (or catastrophic) insurance plan. Just 1% of all employers currently offer an account-based CDHP; however, among the nation’s largest employers (20,000 or more employees), 9% offer a CDHP, up from 7% in 2002.”

“Facing a fourth year of double-digit cost increases, employers – smaller employers in particular – are looking to the federal government for help. Nearly three-fourths (74%) of small employers (those with fewer than 500 employees) say they believe the US health care system is in need of significant government reform, and nearly one-fourth (22%) say they have considered terminating employee medical benefits because of recent cost increases. While a majority of large employers (63%) also believe government reform is necessary, only 5% have considered terminating their health benefits program.”

Sphere: Related Content