California Healthline Highlights Features on Shift of Health Care Costs To Employees
Two newspapers recently examined employers' shift of health care costs to their employees. Summaries appear below.
Baltimore Sun: The Sun on Tuesday examined employers and insurance companies' "rethinking" of "the generous drug benefits" that they have offered employees, which "have helped fuel the galloping growth" of prescription drug costs. According to Stanley Wallack, the director of Brandeis University's Schneider Institute for Health Policy, in the early 1990s "a tremendous onslaught of new, very expensive medications" hit the market and doctors began to write prescriptions "liberally" -- creating "a sweetheart deal for employees," who were making copayments of as little as $5 for medicine that could cost hundreds of dollars per bottle, the Sun reports. Now, employers and insurers "are pushing back," Wallack said. According to the Kaiser Family Foundation, 63% of workers in employer-sponsored drug benefits will have "tiered" copay plans in 2004, up from 27% in 2000. Under these plans, employers direct workers toward generic drugs with cheaper copays. Some employers are also restricting coverage to generic drugs or requiring beneficiaries to pay percentages of the drugs' total cost. Consumer advocates say that the shift in costs highlights "the root of the crisis: the unwillingness of Congress and the White House to force drug companies to lower prices," the Sun reports (Zaneski, Baltimore Sun, 2/24).
- New York Times: The Times on Tuesday looked at health cost pressures on small businesses -- where "health care costs are issue No. 1" -- which are "asking employees to pay more, accept less, or both." A Kaiser survey of 2,800 companies conducted last fall found that insurance premiums for companies with less than 200 employees increased 15.5%, compared with 13.2% for larger companies. The National Federation of Independent Business, which represents about 600,000 small companies, "now places health costs at the top of its political agenda," the Times reports. While President Bush supports association health plans, in which small companies' risk are pooled to provide them with more leverage to bargain for better insurance rates, "these plans would provide only partial relief," and "the politics are treacherous," according to the Times. In addition, Democratic lawmakers and presidential candidates "are calling for more sweeping expansion of government-financed health care," the Times reports. According to the Times, if legislators do not pass new health care legislation in 2004, small employers "will face a grim choice: absorb higher costs at a time when they cannot raise their prices, or alienate employees with cuts in benefits." While a survey from NFIB says that few small businesses are dropping healthcare benefits all together, "many are relying more on temporary workers and part timers, who do not necessarily get any insurance, or outsourcing work to foreign countries," and this trend "is unlikely to end" in 2004, the Times reports (Andrews, New York Times, 2/24).
CNN on Monday broadcast live President Bush's address to a meeting of governors in Washington, D.C., where he discussed a proposal to allow small businesses to form association health plans (CNN, "Live Event," 2/23). A complete transcript of CNN's coverage of the address is available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.