U.S. Employers To Shift More Health Care Expenses to Workers in 2005, Survey Finds
U.S. employers estimate that health care expenses will increase by an average of 12.9% in 2005 but only plan to raise their spending by an average of 9.6%, with many expected to "shift much of the difference to employees in the form of higher required contributions" and copayments for the third consecutive year, according to the preliminary results of an annual survey released on Thursday by Mercer Human Resource Consulting, the AP/Long Island Newsday reports. The preliminary survey results include responses from 916 employers of different sizes collected over the Internet and by mail, with most responses collected between July and August.
According to the AP/Newsday, smaller employers, which likely will face an average 13.4% increase in health care expenses in 2005, expect to have to shift "a particularly large share of the burden to workers," and some could decide to drop health coverage for workers (Geller, AP/Long Island Newsday, 8/26).
Blaine Bos, a health care consultant for Mercer, said that employers also expect to reduce their health care costs through the elimination of some benefits and restrictions on the number of health plans offered. In addition, many employers expect to take advantage of the "intensifying competition in the health insurance market," the Wall Street Journal reports (Fuhrmans, Wall Street Journal, 8/27). Some employers also expect to reduce their health care costs through disease management programs that they have implemented in recent years.
Bos said that the shift in employer health care costs to workers will not address the issue of increased costs in the long term. "If you get into an environment where you have double-digit inflation year after year after year, essentially both the employer and the employees are having to share a bigger and bigger burden and that burden at some point can break your back," he said (AP/Long Island Newsday, 8/26).
Mercer in December plans to release the complete results of the survey, which will include responses from about 3,000 employers (Wall Street Journal, 8/27).