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Employers more willing to pass benefit costs along

MANAGED CARE February 2001. © MediMedia USA
Managed Care Outlook

Employers more willing to pass benefit costs along

MANAGED CARE February 2001. ©MediMedia USA

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Facing significant increases in health-benefit costs, employers appear less willing to bite the bullet than in the past — and are passing many of those increases on to workers. As the cost of coverage crept upward during the last three years, a tight labor market and recruiting pressures led many companies to shield employees from the higher expense. A new national survey finds that with premium increases expected to cross into double digits this year, employers are more inclined to use cost-sharing techniques.

Of the 3,300 employers who responded, the share of those who said that they would increase employee contribution levels this year nearly doubled over last year. One such area is prescription drug coverage, though the added cost to employees doesn't keep pace with increases in pharmacy benefit costs.

Premium increases trend up

The average health benefit cost rose from $4,097 per person in 1999 to $4,430 in 2000.

HMOs lose cost distinction

For the first time in seven years, HMO premiums rose more sharply than those for PPOs.

Workers take the hit

The share of employers who intend to pass cost increases to workers nearly doubled.

Prescription-copayment increases minimal

Copayments go up 12.5 percent, though pharmacy accounts for 17.5 percent of all coverage costs.

SOURCE: WINNING THE LOYALTY OF THE E-HEALTH CONSUMER, DELOITTE CONSULTING, CHICAGO, 2000