Employees who have a choice in employer-sponsored health insurance embark on an annual ritual at this time of year -- weighing whether to stay with the same plan or move to another, perhaps less costly one.
For many, however, the process, known as open enrollment, has turned into an effort in futility. Costs continue to rise and there are few, if any, new options to help employers or employees keep premium increases in check.
So what do workers have to look forward to going into next year? Likely, the same as last year: increased out-of-pocket expenses; higher premiums; and a continued push to enroll in high-deductible health plans that for many don't provide adequate coverage.
What has changed is the backdrop. Open enrollment season commences just as Congress debates legislation to overhaul health-care insurance. Lawmakers are grappling with how to contain costs within a system that has seen employer-sponsored health premiums soar 131 percent during the past decade, according to an annual survey of nearly 3,200 firms by the Kaiser Family Foundation and the Health Research & Educational Trust. That's more than three times the rise in wages and four times the rate of inflation. During that time workers' premium contributions have risen 128 percent.
Premiums for family coverage topped $13,000 annually this year -- a five percent rise, while overall prices in the economy fell 0.7 percent, the survey found. The figures are startling, but the continued steep rise is nothing new to employers or employees, who have watched helplessly as the costs of health care soared in the last decade.
To deal with the increases, employers have resorted to several, now-familiar strategies to reduce their costs without overburdening workers, including increasing co-pays for doctors' visits and prescription drugs, having employees contribute a greater part of the premium, and offering high-deductible plans that offer lower premiums in exchange for employees' increased out-of-pocket expenditures.
The result has been an increase in the number of workers who are paying more out-of-pocket. The Kaiser survey found 22 percent of covered workers must pay at least $1,000 out-of-pocket annually for single coverage before their plan generally will start to pay a share of their health-care bills. That's up from 18 percent last year and 10 percent in 2006.
To help with those costs, some employers offer health savings accounts or health reimbursement arrangements teamed with a type of high deductible plan known as a consumer-directed health plan. Further, some employers contribute to an HSA or HRA, giving employees money (typically $1,000) to help with health-care costs. Money in such accounts rolls over from year to year, to encourage employees to use funds wisely.
Though workers were slow to accept consumer-directed health plans when they were introduced early in the decade, some 40 percent of employees at mid-sized and large employers are opting for CDHPs when combined with an HSA, said Meredith Baratz, vice president for market solutions at UnitedHealthcare, a unit of UnitedHealth Group (UNH), the nation's largest health insurer. "We are long out of the days of single-digit adoption, because it was so new and different," Baratz said. "People have developed a level of comfort" with the plans.
But increased uptake in CDHPs may merely mean it's the only plan an employer offers, as is the case for workers at Blue Cross Blue Shield of Florida. While 60 percent of businesses offer some form of health insurance, employers that offer choices in health plans generally have at least 3,000 employees.
Still, high-deductible plans aren't for everyone. While they may be superior to no coverage at all, they aren't ideal for people with chronic health conditions or who take lots of prescription drugs. They are best suited to young, single workers with few health problems, looking for the lowest possible premium.
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