Newspapers Examine Employer Response to Increased Health Insurance Premiums
Two newspapers on Monday examine how employers are responding to rising health insurance premiums. Summaries appear below.
Los Angeles Times: According to the Times, a growing number of employers are "retreating from family coverage," by offering incentives to workers if they opt out of family coverage or by charging higher premiums for each additional child. By some estimates, family coverage can account for as much as 75% of a company's health care costs, the Times reports. In the past two years, the percentage of companies that fully subsidize family health insurance has decreased from 27% to 15%, according to the Times. The reduction in family benefits has been most common among smaller companies, which have been absorbing the largest premium hikes, and in industries with low unemployment rates, such as engineering. The cuts have been least common in larger companies and unions (Costello, Los Angeles Times, 10/6).
- USA Today: USA Today looks at the impact of increasing health care costs on small business owners. Some small businesses are no longer offering employees health benefits, while others have been absorbing increasing health costs as an incentive for employees to remain with them rather than move to larger companies with better benefits. Premiums this year increased by 15.5% for companies with fewer than 200 workers, compared with 13.2% for firms with more than 200 workers, according to a Kaiser Family Foundation report. In 2003, 18% of small businesses posting lower earnings than last year blamed higher health insurance costs, according to a National Federation of Independent Business survey of 544 firms. Last year, 11% said health care premium increases contributed to lower earnings, according to NFIB (Hopkins, USA Today, 10/6).
The New York Times on Sunday examined several strategies that employees with employer-sponsored prescription drug coverage can use to "keep some of their prescription costs in check." Employees will likely have to pay more out-of-pocket for their medications next year, the Times reports. According to the Segal Company, the cost of prescription drug coverage for employers will rise by about 18% in 2004, and many employers will shift some of the increased cost to employees through higher copayments and other measures. However, the Times that reports employees can offset some of the increased cost "if they are willing to do a little legwork and to be flexible." According to the Times, employees should "carefully review and compare" prescription drug benefit options in their open enrollment periods for health plans. Kenneth Sperling, a health care consultant for Hewitt Associates, said that "it's a good idea for employees not to assume that the drug benefits they had this year are what they will have next year." In addition, employees can switch to generic medications, purchase commonly used treatments in bulk, search the Internet to compare prices, use coupons offered by health insurers and use tax-free flexible spending accounts to purchase prescription and over-the-counter medications to reduce their out-of pocket prescription drug costs (Siwolop, New York Times, 10/5).
More women are remaining in the workforce longer in part because of a need for health benefits, the Washington Post reports. According to statistics released by the Bureau of Labor Statistics, 54.1% of women ages 55 to 64 worked full- or part-time as of September, up from 50.3% in 2000. The increase in women's work rates is "even more considerable" compared with other sectors of the workforce, in which rates of employment have all declined, according to the Post. In addition, a recent study by AARP found that "need for money" and "need for health benefits" were the top answers for older workers remaining in the workforce, while a study by the Institute for Women's Policy Research found that the median annual income for women between 50 and 61 is less than $29,000 -- roughly 66% of the annual income for men in the same age range. "These are among the most vulnerable people in our society, women aged 50 and up," Heidi Hartmann, president of IWRP, said, adding that many of these women who work in "low side" positions do so because "they need even the most basic of benefits they otherwise would not have," the Post reports (Finkel, Washington Post, 10/4).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.