Even with health reform, workers will pay more, get less

By MITCHELL SCHNURMAN

mschnurman@star-telegram.com

It’s open enrollment season for employee benefits, and workers won’t see big changes.

With health reform winding through Washington, companies are generally maintaining the status quo, and you know what that looks like. Most people with health insurance will pay more next year, both for premiums and out-of-pocket costs, and for many, coverage will shrink.

Paying more and getting less has been the trend in health insurance for more than a decade. Even if reform passes, that’s not likely to change soon — not with coverage expanding to the uninsured and people insisting that they keep everything they have now.

You can’t do much about the rising expenses, if you’re a savvy consumer who already takes advantage of tax breaks and other benefit options. But most people don’t maximize the moves, so they’re leaving money on the table. In this economy, those strategies are worth revisiting.

The good news is that healthcare costs in North Texas are rising slower than most other metro areas, according to a survey by Chicago consultant Hewitt Associates. The bad news is that the average now tops $9,500 per employee in Dallas-Fort Worth, making this area second only to Boston among the most-expensive large cities.

If rising healthcare costs seem to be eating up more of your income, it’s not an illusion. And it will get worse, because companies are strapped, too, and can’t absorb all the higher costs.

Nationwide, employees will pay 10 percent more for premiums and out-of-pocket expenses in 2010, Hewitt projects, and it’s the out-of-pocket portion that’s growing fastest. Contrast that with a projected 1.8 percent increase in worker salaries this year, the smallest average raise in 33 years.

Some employers are raising deductibles, switching drugs in the formulary and curbing coverage on services. Forty percent of smaller companies, twice as many as two years ago, now have $1,000 deductibles, according to a survey by Kaiser Family Foundation.

More than 1 in 5 of all employers said they would reduce the scope of benefits or increase cost-sharing in light of the recession, Kaiser says. Cutting benefits is more popular than raising premiums, probably because it creates less backlash at the office.

Health insurance was initially designed as an incentive, but it’s become more akin to an electric bill than a year-end bonus — an inescapable expense that’s always growing.

"Most employees don’t understand the value of their benefits, and when they have to pay more, they actually feel like they’re getting gypped," says Sara Taylor, Hewitt’s health and welfare strategy leader.

Large companies generally pay three-fourths of their workers’ insurance premiums, and they keep looking for ways to lower total costs.

More offer high-deductible plans, and wellness programs are still growing. Alcon, for example, offers incentives to employees to exercise and stay healthy, and it says that health costs have grown at a lower rate than the national average.

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