SURVEY SAYS: Coping with Healthcare Costs

November 7, 2002 ( - Odds are you are in the middle of annual health-care enrollment - or soon will be. This week, we asked our readers to share - what they were sharing - with workers. The annual healthcare increase.

Perhaps not surprisingly given the surveys we have been covering of late, nearly 22% of this week’s respondents said – “you don’t want to know”, with increases ranging from the low 20% range to, well lots more than 20%.  

Those dealing with 10-15% increases were next most prevalent, cited by roughly 20.5%, while nearly 18% are looking at increases in the 5-10% range.  

Incredibly, about 16.5% said workers will not see ANY increase this year – but only because they have made a conscious decision to absorb the increases.   Absorb the increases again, according to most.

Meanwhile nearly 14% are looking at 15-20% increases – with many of those noting a fair amount of negotiation to get down to that level.   A little more than 8% are looking at an increase of 1-5%, but a number of those apparently suffered through a much higher increase a year ago.

As is often the case, the gems of this survey are in your verbatim comments.   Employee reactions to the increases ranged from thankful to angry to – well, some apparently haven’t been able to figure out what they are going to be dealing with.   As one reader noted, “It depends. Overall company increase was 10-15%. We self-insured a couple HMO’s so they stayed flat; they were a few decreases and some moderate to huge increases. Our base plan is going from $0 to $10/mo. As a former math major I know you can’t calculate that increase.  One of our employees wrote in and said it was a 2600% increase (must be new math).”  Or as another noted, G but I’m going to tell you any way.  37% for family coverage!!!!!!!!   OE ends on Friday.  I do not think that the employees truly get it yet.”

Perhaps emphasizing the confusion, another noted, I’m going to select (h) for HA, HA, HA.   20% would have been great. Premiums in our Point of Service plan increased about 25%, in our PPO plan the increases ranged from 71% to 320%, this does not take into consideration the reduction in benefits that accompanied this pleasant surprise.   To add insult to injury the benefits department responded to a question by saying that overall the premiums only went up 14%!?   

In another sign of the (tough) times, a surprising number of plans are still trying to work their way through the negotiations.”  

In another sign of (tough) times, negotiations are apparently still underway at a surprising number of employers.   As one noted, “We’re going to keep it under 10 if humanly possible.   With all our back and forth with the vendors and benefits broker, we still don’t have the exact increase nailed down.”   Then there was the reader who said, “Guessing (f) – 15-20%- , and hoping for no worse…”

But this week’s Editor’s Choice summed up the ultimate challenge for plan sponsors everywhere:  “Creativity counts.   What will i do next year?   Put panty hose over my head And rob   7-11’s?”

Thanks to everyone who participated in our survey!   Don’t miss out on more VERBATIMS on the pages that follow.

The question was: Odds are you are in the middle of annual health-care enrollment - or soon will be. This week, we'd like to know: "What kind of increase will employees at your firm be looking at? Will it be:

(a) a decrease,

(b) flat,

(c) 1-5%,

(d) 5%-10%,

(e) 10%-15%

(f)  15%-20%, or

(g) you don't want to know?

Sadly (f) is what came in from our insurer.   (it's not as bad as last year.)   We are trying to reconfigure the insurance,   to keep the office visit co Pays at $10.00   (lots of employee activity in the doctor's office), and Reduce the percentage increase.   One thing we are considering is increasing the emergency room and in-hospital co pays (much less employee activity, In-hospital) and self-insuring the increase.   Guess who gets to administer That?

Creativity counts.   What will i do next year?   Put panty hose over my head And rob   7-11's?

Think my answer to the survey will ultimately turn out to be "g" although I'm hoping we can get it to "f".  Our initial renewal came in at 28% and we are trying to get that down.  It is a sad commentary though when I would be considered a success if I can keep our increase to only 20%.  I am very afraid for the future of employee benefits....

Happily, luckily, thankfully the answer is (b) flat for next year.  We've been a pretty healthy bunch this year so our rates are not going up.

The employee portion of our monthly healthcare premium has risen by 74.36%!!!

I'm going to select (h) for HA, HA, HA.   20% would have been great. Premiums in our Point of Service plan increased about 25%, in our PPO plan the increases ranged from 71% to 320%, this does not take into consideration the reduction in benefits that accompanied this pleasant surprise.   To add insult to injury the benefits department responded to a question by saying that overall the premiums only went up 14%!?   It doesn't appear the employer is willing to subsidize as much of the premium anymore, so I guess the premiums really didn't increase that much it was that wonderful thing called Cost Shifting.

We are a non-profit hospital (6,000 ee's) and for the last five years our primary medical plan has been a 3-tiered plan (like everyone in Calif. Is talking about).

In our plan, the highest level of benefit is received for using our own providers and facilities. ($10 copay and inpatient at 100%). The mid-tier is using the BCBS providers and facilities ($10 PCP and $25 spec.; w/$500 copay and 20% for inpatient services) The third tier is totally out of network. It has a stiff deductible and co-insurance.

Because we can document that we are the lowest cost provider in the area (eventhough we are teaching hospital) we steer our employees' utilization by the spread in the benefits level (1st tier vs   2nd tier) - although, they have the option of using any tier at any time. We also give employees priority appointments in specialty areas.

The plan also has a lot of bells and whistles such as disease management, pre-natal management, and a $300/person wellness benefit outside the normal mammography, obgyn benefit limits.

Unfortunately, we as a group aren't any healthier than any other group and as medical providers, we should know better. Personally, I think it has just been luck.

G., You really don't want to know and neither do I..., We received a 52% increase last year and 28% this year.   A small non-profit group with some serious health concerns and we just keep facing bigger and bigger premiums.   At some point, we will be forced to phase out the benefit.

(e) - 10-15%   Very anxious to see the results of the survey!

we were hit hard.  (f)

I guess my answer would be both A and B, since my company pays for our premiums and they included dental and vision this time around, plus gave us a new life insurance policy. What can I say? I love everything about my company!

One plan is flat (b) and the other 4% (c).

Our answer is "d" - 10%.   We've had the happy surprise of having our medical experience come in better than budget this year, and therefore, are projecting total medical cost increases of about 10 -11% next year.   We usually apply the same increase in employee contributions as we expect the company to pay.

F.   (15-20%) category.   We had an increase of 16%.

Our increase to employee contributions is going to be 23%!

Medical and Dental premiums will be flat.

We're going to keep it under 10 if humanly possible.   With all our back and forth with the vendors and benefits broker, we still don't have the exact increase nailed down.

While our healthcare costs are expected to rise by 20% next year, we are only passing on a 9% increase to our employees.  

Zero increase, as our firm pays 100% of the cost of health insurance for employees and dependents.   We're very, very fortunate that we work for a company with such great benefits!

Our original medical increase was 15% and I had a hard time convincing my CEO and CFO what a great deal that was!   In the end, we reduced the benefits by increasing the deductible and co-pays and got the final increase down to 6% of which the company picked up 100% of that increase.   Employees will be paying more when they access medical services through increased co-pays and deductibles, but will not be paying more through payroll deduction for premiums for 2003.

The increase will be hard for them to determine because we are going to a flexible benefit plan.

Our employees will be faced with a 25% increase in monthly premiums!  It's that or decrease benefit coverage......

This is our final week of enrollment for 2003 and yes, like most employers we have struggled with pushing cost down to employees and what the company could absorb.   We came to the conclusion that we needed to push some of the costs down, commence an education of employees for usage and costs and try to turn a very expensive benefit away from entitlement and forward looking to health management.   Whether we will be success will be seen in the next year or two.  

The changes were to move the specialist co-pays to $15 regardless of whether you were in the self-insured HMO/EPO or PPO.   We also decided that a drug was a drug regardless of which plan you were in (prior all HMO/EPO received a smaller co-payment for drugs).   We have now moved to the 3 tier with a $10/generic, $15 formulary brand name and a $20 non-formulary brand name for each 30 day supply.   Mail order is cheaper.   It is 1 1/2 times the 30 day supply.   We have also announced to employees that as of 2004.   We will no longer provide local HMO services, one National provider will be utilized.

Aetna our current National provider did work very hard with us to hold costs, provide creative ideas on costs and actually locked costs in for us for the next 3 years if we choose to stay.   Our hope is that an educated employee will begin to see the benefit of getting yearly physicals, purchasing generics vs name brands and utilizing the PCP.

Projected increases for medical plans for all salaried employees:
Self-insured PPO (19%)
Fully insured HMO's - average (7.5%)
Combined average (12.9%)

Projected increase for Prescription drugs for salaried employees:  (20%)

Projected increases for medical plans for all union employees:
Self-insured PPO (10%)

Projected increase for Prescription drugs for union employees:  (20%)

(g) you don't want to know.   My share has increased 25%.   If I wasn't married with kids I would just take my credit towards the premium and cancel the health insurance.   but I know with others counting on the benefits that isn't the smart thing to do.

our answer is 'e' and we negotiated down to that.

g) you don't want to know.

With fewer than 50 employees and some pretty serious health concerns, we've seen increases over 20% for the last few years.   The company picks up most of the tab, but the increases still hit our employees hard.   The healthy ones complain about the costs, but the less healthy people don't.   I remind everyone that there's nothing more important than their health and it's not guaranteed.   When you view health insurance as a protection from risk instead of a prepayment for services, almost any premiums seem justified.

f. but on the lower side

We will experience a rate increase of 12.7% for 2003, and employee cost is going up 15.7% for single coverage.   The employees' single coverage cost will be $46.92/month next year.   This is for a self-insured BlueCross Blue Shield of Minnesota "Cadillac" plan.   We also are adding a new plan with a low premium, but high cost sharing option for 2003.   Employee cost for that plan will be $7.29/month with a maximum out-of-pocket of $1,200.

We have had our employee meetings, which were well attended.   Now we sit back & wait for the enrollment forms to come in, to see if our new option is well received.   We anticipate about 10%-15% of our employees will migrate to the new plan.

The struggle to balance my roles as an "employee advocate" and "university steward" gets more difficult each year.   Where, oh where, is that magic answer?

We are looking at a 5% increase in the employee contribution to our health care premiums.

Actually, we just had really good experience this year, along with some rate guarantees from the carrier.  Last year, we mugged employees with a 72% increase- that sounds really bad- but actually the company was paying 100% of the cost of the dental premiums (who has ever heard of that?!- I just joined the company in November of last year when the 100% coverage of the premiums for the dental plan had been in place for a while), and we dropped that to 50% for 2002.  We also raised the medical premiums by 20-22% for plan year 2002.  The cost sharing was way out of line for the company, so I am happy to say that we are back on track, and the minimal increase this year proves it.  I am anxious to know the results from other companies who respond to the survey, as I will use it as evidence for employees who complain about the 5% increase 🙂

We don't have the official rates yet but the word is 12 - 15% increase in premiums.  We are expecting the latter.

Overall our rates increased by 22%.   However, we offer an HMO, POS and PPO - the POS took the smallest hit.   As a cost saving measure, co-payments for prescriptions were increased from 20% of cost to 25% of cost with a minimum $8 co-pay.   Based on the blip that appeared today, I am very interested in seeing how that affects our participant's behavior.

b (flat).   It amazes me that our company continues to pick up the full cost of medical coverage for employees and their families (although spouses are eligible only if they don't have coverage elsewhere).

After shopping our health coverage [once again] we were able to move our 75 lives to a new carrier and only absorb a 27% increase as compared to the 41.9% increase proposed by our then current carrier.   This is the 3rd renewal in excess of 25% for our medical practice.

Healthcare and employee benefits are very important to the owners of this firm.   We have never had an employee contribution, and it will continue to be that way next year, so the answer is (b) flat at zero contribution.

Our employees are looking at a 5-10% increase for medical and dental contributions. Lower than last year.

Rather than increase the amount employees share in premiums, we opted to change the cost sharing of certain services.   For example, we increased deductibles and out of pocket limits, increased brand and mail order prescription copays, etc.   We did this because the bulk of a plan's cost comes from a small percentage of participants who are chronically or terminally ill.   We felt it was unfair for everyone suffer in increased premiums to cover those who drive the cost, so we are instead impacting those who drive the cost by increased cost sharing when services are rendered.

We also eliminated all HMOs except where contractually required, or where projected claims on a self-insured PPO basis would exceed actual premium costs for the HMO.   This resulted in full elimination of 4 HMOs, partial elimination of 2 HMOs, and complete renewal for 1 HMO.   Adding these employees back to the PPO, plus folding in a subsidiary's employees into our program will result in more PPO participants over which the risk is spread, and in theory will help control costs.

All of these changes will mean a much smaller increase for overall medical insurance for our company than most (approx. 5-10% increase vs. 15-25% or more had we continued the HMOs).

Try $327.00, 26 times a year for family coverage.   I think it went up about 45%.   Single coverage is $109 per pay (26 pays) and by the way these rates are for 90% coverage.    EEEK!   I'm glad I don't have children!   We do have some less expensive coverage levels 80%, 70% etc.  

Our answer is G) You really don't want to know.

Our insurance increase is 28.2% and we are increasing EE contributions by the same percentage.   Interestingly, we didn't get any negative response.   I believe it is because the media has been screaming so much about the high cost of healthcare and the increases that others are facing, so our employees figured they were lucky it wasn't higher.   The only comments we received were from people who had needed to really use the insurance (which bumped up our increase since we are experience rated) who said they were grateful to have the insurance.

I hate to use wimp words with it but I have to put us in the (g) don't know category.   This year was the first year we had employee contributions and it wasn't received well because deferring some of the costs to employees was not matched with increased benefits and it wasn't necessary for company survival.  

The increase was viewed as a company gouge to employee paychecks.   The roll out of the new employee contribution concept was also matched with a very low annual pay increase so some actually saw a lower check after pay raise.  

Currently the company is rolling out a new benefit of medical savings plans and section 125 for employee contributions.   It hasn't been spoken yet but I do expect to hear about an increase buy the end of summer or some time post July 4.   Hopefully there will be a better more complete presentation of the overall vision rather than a piece meal roll out.   My observations have always shown every time someone assumes the masses are fools and not sophisticated enough to understand the "vision" the brilliant person who made that decision is closer to the fool status.  

a) about 5% plus a slight bump in benefit---miracles do happen!

We are anticipating a 15% increase (which is better than the initial proposal for 28% increase that we started with).   Company pays 85% of premium costs so employer and employee increase will be 15%.

Our increase was last year - none this year   - but we are still hearing about last year's increase.   The sad part is they still aren't paying that much - $20/week for single and $35/week for family.   That includes medical, dental, prescriptions, vision and hospitalization - although there is no choice in upgrade your level coverage.    I would like to see that as your next survey question to see how we compare to other companies.

Unlike our health insurance - our companies liability insurance increased by 300% - we are a trucking company and as a result of 9/11 insuring a trucking company is very very expensive now.  

We are currently in our open enrollment period, and our rates have stayed flat.   However, that good news is only skin deep.   In order to keep rates steady, we now have increased deductibles, increased out of pocket maximums, increased co-payments, and increased co-insurance.   Considering our family rate is over $500.00 per month, there is no good news here.

We're looking at (e) 10-15%...........and we've had to change our plan design somewhat to keep it that low! The insurance industry PR has prepared us well...........we're actually THANKFUL it's not any higher!!!

As a company we decided to absorb the increase of the health insurance this year and not pass it on to the employees.

We are still early in the process, but we do anticipate a 5-10% increase.   A few pending large claims could change that in a hurry.

(d) about 9% overall. The actual increases in the various products we offer ranged from 5% to 19%, but the Firm chose to increase flexible benefit credits to offset the worst of this and subsidize certain plans to keep the increases more even. We didn't want anyone having to bear the burden of a 19% increase - which, incidentally, was originally proposed at 21%. We are fortunate in that unlike many employers, we are having a good year and were able to absorb some in the increase impact without hurting the Firm's results.

We haven't decided yet.   Our employee/employer split has crept up as we have limited employee contribution increases, and some of the decision makers are concerned.   Some want to hold the increase to single digits, since we have gone three straight years with double digit increases to participants. But the impact on the shift to employer cost and the split beyond what our original target was, causes others concern.   The delays will mean a lot of last minute work for us in trying to get whatever is decided out in time for our open enrollment...oh well, that's what they pay me the "big bucks" for.