Wall Street Journal Examines Health Care Cost Shift to Employees
The Wall Street Journal today examines "aggressive" efforts by employers to shift a larger share of their health care costs to employees through increased copayments, deductibles and premiums. According to the Bureau of Labor Statistics, out-of-pocket health care costs covered by employees on average increased 26% between 1995 and 2001, to $2,182 per year. In addition, average monthly contributions made by employees for premiums for family health coverage more than tripled to $174 from $52 between 1988 and 2002, according to the Kaiser Family Foundation. The Kaiser Family Foundation also said that copayments for brand-name prescription drugs with generic equivalents increased 62% to $26 in 2002 from $16 in 2000 and that copayments for generic medications increased to $9 from $8 over the same period. A study conducted by the Washington Business Group on Health, which represents about 200 large employers nationwide, found that 57% of employers plan to pass more of their share of health care costs to employees in 2004. Many U.S. residents can afford increased copayments, deductibles and premiums "without serious hardship," but "there are wide segments of society that are hit hard," such as low-income employees and the elderly, the Journal reports. However, employers maintain that they can no longer afford the 12% to 15% annual increases in the cost of health coverage and must "show their employees the true cost of health care and correct the mistaken idea that a doctor's visit is only $10 or that drug prices haven't risen as substantially as other goods," according to the Journal. The cost to employers of health coverage per employee has increased 57% since 1997 in part because of increased use of physician services and expensive prescription drugs and diagnostic tests, according to Mercer Human Resource Consulting. According to the Journal, increased copayments, deductibles and premiums could have a "lasting negative effect" on U.S. health care costs. Individuals might not fill required prescriptions or visit their physicians over cost concerns, and "they are likely to become sicker and require more expensive care in the future," the Journal reports (Martinez, Wall Street Journal, 6/16).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.