According to a recent CNNMoney article, employees should expect “shockingly” higher health care costs in 2010. The increase is expected to be somewhere in the 10% – 20% range, and will likely come in the form of increased deductibles, higher copays, co-insurance instead of co-pays, and/or a larger share of the premiums being deducted from paychecks.
This will no doubt cause some consternation among workers who see reductions in benefits and increased out-of-pocket exposure, but with the state of the economy and the rising cost of health care, it’s the only avenue that really makes sense for employers. Most companies that offer health insurance benefits do so as a way to attract and retain the best workers they can find, so limiting benefits and increasing the employees’ share of the costs is likely the option of last resort.
But maybe it makes sense, regardless of how well the economy is doing. There’s no doubt that a co-insurance based system, where employees pay a percentage of the charges, rather than a flat copay, would make people more aware of what health care actually costs. Nobody should have to devote their life to trying to obtain coverage for a serious medical problem, but on the other end of the spectrum, perhaps nobody should be paying only $15 to see a doctor, and a deductible of a couple hundred dollars a year. Health insurance plans that cover nearly all costs for their members have the effect of insulating consumers from the true cost of health care. This is especially so if the premiums for the health insurance policy are mostly paid by the employer.
When it comes to things like housing and vehicles and food, most people expect to pay those expenses – which are often quite significant – without assistance from anyone else. It seems to me that health care is equally as important as transportation and shelter, but because we’ve grown accustomed to the idea of someone else paying the lion’s share of the bill (ie, health insurance companies and our employers), we don’t expect our own health care expenses to be as much as we spend on other life necessities like housing and groceries.
For self-employed people, and those who have been buying their own health insurance because they don’t have access to a group plan, high deductibles and annual premium increases are already a fact of life. Most of our clients here in Colorado opt for deductibles in the $1500 – $3000 range, and often choose HSA qualified plans as a way to lower their premiums – with the understanding that they will be taking on an increased portion of the claims if they get sick. But most working Americans get their health insurance through their employers, and have thus been largely shielded from the actual costs of health care and health insurance. Perhaps that is changing now. And perhaps the changes will increase pressure on the health care industry to do something about spiraling costs.