Increased Cost of Employee Health Coverage Impacts State’s Midsized Companies the Most, Survey Finds
Increased health insurance costs have "hurt the state's midsized companies hardest because they lack the power" of larger companies to negotiate reduced rates from insurers or the ability of small businesses to eliminate health benefits, according to a new industry survey, the Los Angeles Daily News reports. In the Pacific region, which includes California, Oregon, Washington, Alaska and Hawaii, midsized employers -- those with 200 to 999 employees -- faced an 11.5% increase in the cost of their health benefits in 2001, an average of $5,005 per employee, according to the Marsh/Mercer Midsized Employer Health Plans Survey. Mark Mathias, an employee benefits practice leader with Marsh in Los Angeles, said, "Midsize employers are in a double bind. They need to offer a benefits package that is comparable to those offered by larger employers, but they don't have the purchasing power of large employers nor the resources to devote to benefits cost management." Although many California employers attribute increased health care costs to the managed care industry's relaxation of cost-containment rules, Blue Cross of California spokesperson Michael Chee said that health insurers have raised premiums to offset the increased cost of hospitalization and prescription drugs, as well as inefficient use of health services (Pondel, Las Angeles Daily News, 7/24).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.