SURVEY SAYS: What's Your 2011 Health Care Rate?

October 21, 2010 ( - ‘Tis the season for health-care package rollouts. 

While there have been signs that the rate of increase is slowing, there doesn’t seem to be much sign that there has yet been any real downward curve in that cost curve.  That said, change is afoot, and plan design changes – both those now mandated by law, and those pursued in the interest of design enhancement and cost management have certainly had some impact. 

This week, I asked readers what was happening with YOUR health care costs for 2011.

Well, first off, it should perhaps come as no surprise that only one of this week’s respondents reported a decrease in costs with their plan (and no, I don’t know who it is).  However, roughly 10% did report that their health care cost increase for 2011 was flat – and that surely has to be good news for those programs (and no, I don’t know who they are, either) – and a full quarter (25.4%) reported those costs were going up by less than 5%.

At the other end of the spectrum was the 28.4% who said their program costs were going up by more than 10% (one reader indicated more than 30%, another 47%), and another 22.4% who indicated their rate of increase was between 7% and 10%.  The rest of the respondents – 13.4% said theirs was rising by 5%-7%.

All in all, then – a considerable disparity in results – and that doesn’t take into account a good number of respondents who, like this reader noted, “We don’t know yet.”  Additionally, there were readers like the one who said they had an “8% increase AFTER slicing benefits. Our costs started escalating late 2009 and haven’t stopped”, and another that observed “We reduced the cost increase to 3.1% by increasing the deductibles.”  Another noted, “After adding consumerism to our plan this year (moving from co-pays to co-insurance) we’ve seen utilization drop by 20%-30% and our costs are lower than they were two years ago. We’re making some plan enhancements for 2011 and expect our costs to go up by about 8%, largely due to hospital rate increases”.   

.Now we all know that some elements of health care reform have already set it – notably coverage of adult children and removal of lifetime limits and preexisting conditions – so I asked readers how much, if any, of this year’s cost changes had been attributed to the change in legislation. 

For the very most part – not much.  The most common answer was “none”, cited by 39.4% - while another 28.8% said just 1%-2%. 

The rest broke out as follows:

10.6% - 2%-3%

 4.5% - 3%-4%

 3.0% - 4%-5%

 1.5% - 5%-6%

 1.5% - 6%-7%

 1.2% - 7%-8%

On the other hand, just under 10% said that more than 10% of the increase had been attributed to the health care reform legislation.

For years, studies have shown that employers have worked hard to insulate workers from much of the increase in health care costs over the year – so this week I asked specifically if workers would have to pay more than they did in 2010, other things being equal.   

On that count, 34.2% said “yes, a little”, while 13.9% opted for “no, the same”, and 12.7% said they would pay more, “but the impact varies widely.” 

On the other hand, 27.8% said they would not only pay more, but a “lot” more, while the remaining 10% weren’t sure.

Other Insights

There were, of course, some interesting and insightful verbatims.  Here’s a sampling that offers a sense of what’s going on:

Most insurers in our area are including PPACA mandates in grandfathered plans and price accordingly.  The cost increases make it impossible to remain grandfathered.

No where to hide, checked with all vendors in the area, costs are through the roof!

"I thank God for my wife's company.  They have a very generous benefits program.  We've been on a high deductible HSA for several years, and although we've drained the HSA each year (thanks to one broken arm, one trip to the ER for a gash in the head, and a week long hospital stay for my older son related to swine flu and an MRSA infection), we've still come out on the better end of the deal.  The plan costs us hardly anything each month, it covers ALL preventive care and checkups, and her company gives us a generous match for the HSA.  I like this plan in that it forces us to take ownership of our health care and the related expenses.  We don't get something for nothing, so we aren't inclined to run to the doctor for every bruise or scrape.  Since preventive care is covered, we're encouraged to have our regular physicals. 

We are negotiating now so I don't know how (or if) we will be successful in achieving a reduction in our renewal quotes.  At least our carrier didn't try to blame health reform on the large stop loss increase.  While our experience has not been bad other companies in their stop loss pool had greater than anticipated losses.  As a result we have to pay more even though we didn't contribute more than what would have been anticipated to the stop loss experience.  How fair is that?

Our employee contribution rate has been much lower than the market in general, so we have been inching it up by 1% (employee only) and 1.5% (other coverage tiers) most years. We skipped 2010 because there were no merit increases, but resumed our increases for 2011. With a 10% premium increase and the 1%/1.5% employee contribution increase, the employees are taking a bit of a hit this year, so I will hear a lot of complaints at the open enrollment meetings beginning next week.

The only thing that our employees will be concerned about is adding their "adult" children to their plan.  In this depressed economy, young people are having a difficult time finding jobs with benefits, and, it's great that parents can offer them coverage until they can be on their own.  However, for the children who do not intend to "grow up", this plan to continue coddling them is insane and will ultimately cost us because of their immature behaviors.

This year our employees will shoulder more of the burden with higher deductibles, out of pocket and co-pays. Essentially they will pay for less coverage than they had last year.

One positive note: the national attention to healthcare reform has many more EE's paying attention to open enrollment, reading the communications (wow) and being more active this time of year.  Crazy for us but a good thing!

We elected to make a slight change in the employee contribution amount since we haven't made one in 3 years.  However, we made increases in the amount employees pay at the time services are obtained (deductibles, copayments, and other out-of-pocket payments).  Included is an increased campaign for employees to take responsibility for their health care decisions...wellness, investigating treatment alternatives, prescription drug alternatives, asking their doctor questions about these items, etc.  It's difficult to challenge the health care industry, especially the drug company propaganda machine, but we will never give up trying.  The waste these industries propagates will ultimately destroy private health care as we know it, if it hasn't already.

Health care reform had a minor impact on our premium. We already complied with most provisions. Our big increase is largely due to our own experience.

Our renewal is 9/1, so many of the provisions of Health Care Reform did not "kick in".  However, based on anticipated changes, we took an increase anyway.  Also, our carrier, kept graduating college students in the plan as of May, 2010, so we have a lot of the up to age 26 group.  Already have many mandates in California.  I'm hoping for improvement in 9/2011!

Still working out details

"Most of our workers are in a self-insured VEBA but we have some foreign service workers in a fully insured plan that is going up almost 14%; 4%+ is attributed to PPACA.

Our Plan Year runs from 08-01 to 8-01, so I'm not sure what our next year's premium will look like. I suspect it will increase at least 10%.

There is no comment from my company, just that overall healthcare costs will increase by about $5 million. 

"Our employer is trying to pressure everyone into a ridiculously high deductible plan. If you don't sign up for it, you receive spam emails telling you why you are obviously misguided and should do your math again. Excuse me, I already did the math and that plan is AWFUL. The out of pocket soars from $400 to over $4,000 and if you have known health conditions, it costs a heck of a lot more for care over the course of the year. And to help push people in the direction they want them to go, they raised our premiums on other health plan options by over 30%.

Benefits are being cut left and right - and they're doing it because they can get away with it in a lousy economy. My employer used to pride itself on attracting talent by offering best-in-class benefits, but no more. Now they put out propaganda telling us that 64% of other companies are reducing healthcare benefits and raising premiums, implying we can't really do any better anywhere else. The message loud and clear is - ""Don't like the changes? Too bad. Everyone else is doing it, so we are too.""  There's messages everywhere we turn this year pushing the high deductible plan, it's a massive internal marketing campaign. Rumor says by next year we won't even have any other healthplan choices.

The people hardest hit by the high deductible plan approach are older and chronically ill employees. Almost makes me wonder if a side benefit of these changes for employers is that workers who most need really good insurance become unhappy and leave. Thus subtly weeding them out through attrition, leaving the employer with a higher percentage of young and healthy (and single) employees, who are much cheaper to insure overall."

We added a CDHP with a back-end ERA and high deductible.

The easiest year ever, by far.  We got a great renewal from both of our health plan carriers.

We're hoping to be able to keep everything the same.  However, our labor contract defines the hourly employees' contribution.

We were initially told that our costs would remain flat in 2011.  We then learned that we would have a new health care provider for probably the first time ever but were assured that our costs would still remain flat.  I don't know if my employer is picking up the extra cost if there is any but that was a relief.  Unfortunately, I feel that we've only hit the tip of the health care reform iceberg and things will most likely drastically change over the next few years.

These are the ones with special resonance for me:

It was a brutal three month negotiation process, starting with a 42% increase on medical and 51% increase on dental.  After major plan design changes (that will finally force some employees to become active consumers for their own health care expenses), we ended up with a 18% increase.  Forget about trying to stay in grandfather status!!  As a small company, we could not afford to eat an extra $500K in medical premiums alone.

The coverage is basically the same and co-pays stayed the same, but the deductible for everyone doubled and now the co-pay doesn't cover all doctors.  The company starting sending out propaganda weeks ago stating the increases were a direct result of Health care reform.  Real?  or an excuse to pass on the costs?

Open enrollment material hits mailboxes this week but the phone calls are hot and heavy (some taking 30 minutes!) about getting adult children back in the self-insured plan...God help us if we are to survive this open enrollment!"

Most of our cost increase (from the employee's perspective) comes in the form of increased copays, coinsurance and deductibles. So even though the insurance premium went up by 7.5%, the total payout by employees is going to be much higher.

We're going to begin charging by dependent, which means that folks with 1 kid will pay less in 2011 because they (we) have been subsidizing those with more.  The break comes at the 2 kid level; they're paying only a very little more.  With 3 or more kids, the rate increase gets significant.

This year's cost increases give us another chance to try to get the message out about the benefits of taking care of your health and participating in the company wellness program.  Now, if we can just get folks to understand that their unhealthy habits are a big reason why their costs are increasing!

We've already started for a spring 2011 OE - UGH!

But this week’s Editor’s Choice goes to the reader who noted, “It's a lot like dealing with the change from summer to fall. You know it's coming and you should be preparing but it's too early and you'll get around to it later. Then boom. Employees know it's coming. We've been telling them for months. We hope that there's not a contingent closely watching the tactics of the French.”