Shifting Health Care Costs to Employees ‘Does Little’ To Address Larger Cost Issues
Many U.S. employers plan to shift most of the "substantial increases" in their health insurance costs next year "directly on the backs of workers," but the "cost-shifting strategies do little" to address the problem of increased health care costs, according to a USA Today editorial. The editorial cites a recent Kaiser Family Foundation survey that found 78% of large employers in 2003 plan to increase the share that employees must pay for health insurance, an increase from 44% a year earlier. According to the editorial, the shift in health insurance costs to employees may provide an "easy, short-term solution" for employers, but "simply requiring employees to pay more for the same types of benefits" would move the health care system "away from where it needs to go -- toward one in which workers are given new incentives to be price sensitive health care consumers." The editorial recommends that employers shift from "defined benefit" health plans to "defined contribution plans," where employees would receive a set amount for health insurance and would decide "what level of coverage best suits their health and financial needs." However, the editorial points out that according to a University of California-Los Angeles study released this summer, only 15% of employers have considered a switch to defined contribution plans, which many said "would be complicated and risky." The editorial states that the "bulk of companies are simply passing the cost of today's failed system onto their employees" through increased paycheck deductions for health insurance premiums, higher copayments and deductibles and reduced benefits. Although "reshaping the health care system along consumer-driven lines will be difficult," the editorial concludes that without reforms, "there's little to stop today's cost crunch from turning into tomorrow's full-blown health care crisis" (USA Today, 9/24).
"Contrary to popular belief," employers "continue to pay the greatest share" of increased health insurance costs and consider the "unrelenting rise their most serious benefits problem," Washington Business Group on Health President Helen Darling writes in an accompanying USA Today opinion piece. According to Darling, employers -- who she says will spend more than $10,000 per employee for family health coverage in the next few years -- "cannot make and sell enough in this economy to keep absorbing these increases." In response, Darling writes that employers have partnered with health plans to pay more to providers who meet "high standards for quality and patient safety" and have implemented disease management program to help "reduce waste while reinforcing good quality." She concludes, "Employers are developing innovative health care solutions. Working together with physicians and health plans, we can align incentives and drive the system toward higher quality, lower cost increases and greater innovation" (Darling, USA Today, 9/24).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.