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  • Employers Shift Medical Costs to Workers
  • Survey: Personal Behavior Should Factor in Healthcare Policy

  • Employers Shift Medical Costs to Workers

    Expect to see growth in consumer-directed health plans.


    Employers are paying less for employees’ healthcare, and those workers are picking up the tab, a healthcare consulting firm says.


    Employees’ share of healthcare costs grew by an average $650 per worker, including $500 in increased payroll contributions and $150 in higher out-of-pocket costs over last year, according to the Milliman Medical Index released May 18. That’s an increase in spending for American workers of 10.6 percent over the past year, according to healthcare consulting firm Milliman’s fifth annual index.


    Healthcare costs for Americans who get medical coverage through an employer hit a record $16,771 per family this year, Reuters reported. That’s up 7.4 percent from 2008’s $15,609, Milliman said.


    Employers’ health-insurance subsidies rose, but not as fast as the cost of healthcare, according to the index.


    Employers’ subsidies for their workers’ coverage increased about $500, or 5.4 percent over the past year, the report said. The rise in employees’ costs exceeded employer costs by 30 percent, CNN reported.


    Findings: Miami Costly, Price Hike Slowing


    The MMI found that Miami had the highest annual cost of healthcare -- more than $20,000 -- while Phoenix had the lowest among U.S. cities, below $15,000 and 11 percent lower than the national average.


    While medical costs trend upward, momentum has slowed. The total medical cost increase is the lowest annual trend rate since the MMI started five years ago and is the third consecutive rate decrease.


    The MMI predicts workers will spend nearly 15 percent more in employee payroll deductions for 2009 healthcare compared to 2008. Employers’ healthcare costs and employee out-of-pocket medical costs will both rise by 5.4 percent, the lowest medical cost increase over the past five years.


    Observers blame the recession for the shift of costs from employer to worker and say some employers aren’t waiting to see whether the economy will turn around.


    Expect More of the Same


    Mercer, an employee benefits consultant, says nearly half of 428 employers polled said they plan to shift more health costs to employees in 2010, the Wall Street Journal reported. One-fifth of the companies said they planned to add or switch to a high-deductible or “consumer-directed” health plan with a health savings account, perhaps doubling the percentage of employers who offer such plans, Mercer said.


    Milliman predicts more of the same in the foreseeable future. In part because employers can only change benefit plans annually, “we expect benefit plan changes to continue even after the recession subsides,” the MMI’s authors said.


    Meanwhile, the authors say, more attention on “outliers” will reduce “medically unnecessary utilization.”


    Milliman theorized that initiatives aimed at improving efficiency and quality of medical care are reducing unnecessary hospital admissions and driving greater use of outpatient medicine.

    Jun 16, 2009, 04:01

    Survey: Personal Behavior Should Factor in Healthcare Policy

    Many say they would change lifestyles if they could save $350 per month.


    The American public may need to put its money where its mouth is, as it complains about healthcare policy and reform. In a recent survey measuring consumers’ perceptions about personal accountability in healthcare, more than half of respondents agreed with the concept of

    accountability, according to Suffolk University and Silverlink Communications.


    Specifically, this survey asked Americans whether health is in a person’s own control and if health behaviors affect the country’s overall healthcare costs, Silverlink reports. Other questions included whether people with unhealthy habits should pay more for health insurance and if monthly savings would motivate a change in health behaviors.


    The key findings were

                • In general, Americans feel that their health is within their own control; and

                • Seventy percent of respondents acknowledged that personal health behaviors impact the country’s overall healthcare costs.


    Should the Unhealthy Pay More?


    Despite how sure respondents were about controlling their health and the impact on healthcare costs, respondents weren’t so sure that those with unhealthy habits should pay more for health insurance.


    However, the majority of respondents said they’d be willing to change their health behavior if they could save money -- and one-fifth would do this for less than $100 per month. The median savings it would take for respondents to be willing to change their health behaviors is $350 per month. “So in essence, we could motivate better health behaviors for more than half of our population for less than the average car payment per month,” Silverlink said.


    Demographic variables also played a strong role in the responses. Several key findings included:

                • As people report better health status, they increasingly believe in personal accountability in healthcare (those with unhealthy habits should pay more for health insurance).

                • People with good, very good, or excellent health believe that a person’s health is within their control more readily than those with fair or poor health.

                • Americans with higher incomes and education levels are more likely to believe that their personal health behavior impacts our country’s overall healthcare costs.

                • The self-insured are more aligned with personal accountability in healthcare than people with other types of health insurance coverage. This is perhaps due to the fact that self-insured are more cognizant of the full cost of healthcare, Silverlink concluded. The uninsured are the group least likely to believe in personal accountability in healthcare.


    For more information on this study, contact Silverlink Communications at

    Jun 16, 2009, 03:55

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