New Health Plans Move More Than Costs to Employees

By Amy Joyce
Washington Post Staff Writer
Sunday, November 26, 2006; F06

For many workers trying to decide which health plan to choose, this year's open enrollment season comes down to two options: higher costs or higher risk. Rising costs are old news, but the higher risk is new, compliments of a growing trend to push more employees into "consumer-driven plans," in which employees assume more responsibility for their health-care budget.

Either way, you pay -- whether taking on higher risk or taking more dollars out of each paycheck. And with health costs rising ever higher and more employers saying they can't take on the entire burden, the squeeze is on each of us.

The best many can hope for, it seems, is that the blow will be blunted.

 

Ajay Sathuluri, a senior Web and database engineer for TeraTech, a Rockville software firm, began feeling the pain last year. The company's health-care costs had gone up 25 percent, prompting Michael Smith, the president of the 15-person firm, to make some changes.

 

His solution: offer options that switch health-spending decisions on to the employee and find other ways to make the company a more attractive place to work.

Smith switched the firm from a CareFirst Blue Cross Blue Shield plan to a health savings account. The consumer-driven plan allows workers to set aside money before taxes to help with medical expenses. Total annual out-of-pocket health expenses, not counting premiums, can be as much as $5,250 for a single person or $10,500 for a family.

"This is their money," Smith said. "So if they want to go to the doctor three times a week, fine, go spend the money. If they want to do preventive stuff, go spend your money on that."

Sathuluri, who has been with the firm for seven years, said he and his wife were "very worried" about the change. They were planning to have a second child. And Sathuluri wondered whether he should consider moving to a larger company that offered better, more affordable benefits.

Instead, he started a flexible spending account -- a set-aside of pretax money to pay for medical expenses -- in which he has $3,000. He also bought insurance through CareFirst to help with his wife's appointments. That costs him an additional $125 each biweekly paycheck and has a deductible of $2,500 per year, paid through his flexible spending account.

According to estimates, the average pregnancy from test through delivery costs $6,500 to $10,500.

Smith, meanwhile, wanted to find some way to ease his employees' pain -- without incurring heavy costs. He provides free healthy drinks and flexible work schedules.

That was enough to persuade Sathuluri to forget about job hunting.

His wife is due around Christmas, and he is happy he stayed. On Fridays he works from home to spend more time with their 2-year-old daughter.

Health-care benefits are an increasing concern among workers, though managers do not seem to realize just how big a worry they are.

In a recent survey by Watson Wyatt Worldwide Inc., a benefits consulting firm, no employer thought health-care coverage was a key reason top performers leave. When top-performing employees were asked the same question, 22 percent said they would consider leaving if coverage was lacking or too expensive.

"The job market is booming," said Jane Weizmann, a senior consultant with Watson Wyatt. "When you look at it that way and think of health care as a satisfier or dissatisfier, you think, 'If I have to pass higher costs on, how do I package that and make sure the deal feels balanced?' "

Some companies, such as Marriott, are offering free preventive care to take the edge off higher health costs. This approach works toward two goals: The employee sees a bonus, and it helps improve employee health, which may in the end help cut the costs of health care.

Marriott employee health-care costs have risen about 5 percent this year, according to Jill Berger, vice president of health and welfare benefits.

Stephanie Hampton, a company spokesman, is due to have her second child after Christmas. This time around, because of Marriott's Active Health Management program, she has not had to pay anything for her pregnancy appointments. The program is still growing and is not yet offered to every employee. "We're trying to get it everywhere," Berger said.

 

Employees with chronic conditions, or conditions that can be managed, such as pregnancy, diabetes or heart disease, don't have to pay for regular appointments related to those conditions. The assumption is the more the employees go for preventive care, the fewer expensive hospital visits and longer-term health conditions they will have.

 

In addition, drugs related to those conditions are free.

"If you have a chronic condition," Berger said, "one of the problems that we identified is compliance. A lot of drugs every month and co-pays add up. So if that becomes a barrier, people might stop taking it."

Many companies are turning to their employees to make the right health choices to keep everyone's cost down.

In some cases, employees get incentives to complete health risk appraisals and to use generic drugs.

"Employers are very interested in this because by making employees healthy, they are also more productive. It's also a more efficient way to pay for health care," said Tracy Watts, a principal with Mercer Human Resource Consulting.

Maryland's Black & Decker provides its employees with up to $300 to spend on such things as exercise equipment, gym memberships or on-site Weight Watchers programs.

Raymond Brusca, vice president of benefits, said health-care costs have been reined in by an aggressive program aimed at making employees responsible for what he calls "health consumerism." Employees are encouraged to take charge of what they eat, how they exercise, and whether they should agree to multiple X-rays and medical tests.

In addition to the $300 fund, employees can get $50 to complete an online health assessment. They may also be assigned a free health coach. Starting next year, workers can get up to an additional $150 for such activities as exercising three times a week, taking part in disease management programs and accessing health information on their insurance carrier's Web site.

For the first time next year, employees will have to pay 20 percent of the cost of the prescriptions. In the past, they had a fixed co-pay. The company hopes once employees see how much their prescriptions cost, they will choose generic drugs. Of Black & Decker's total health-care costs, prescriptions account for 21 percent, Brusca said.

The company is raising rates next year, but employees can get a lower rate if they sign an agreement certifying they do not use tobacco, Brusca said.

A payment for exercising, or for not smoking, may not dramatically offset the rising premiums and higher deductibles, but at least it helps some people feel their company cares. But there is no question people miss the old system that now seems so easy.

 

"A lot of this is carrot and sticks," Brusca said. "Some would say carrot and club."

Bullet Points for Legislators

  • Single Payer saves money.  For the past 20 years, states have commissioned studies on different types of health care systems.   In EVERY case, single payer was shown to be the only way to cover everyone and the only system that saved money and controlled costs.

  • Publicly financed does not mean government run health care.  YOU have publicly finance health coverage, but the government does not make decisions regarding your health care.

  • Cost conscious patients often don't get the care they need.   Most decisions are made by the doctor in concert with the patient, but the patient relies on the doctor's knowledge to make a decision.  Expensive tests and treatments cannot be ordered by the patient, only the doctor.

  • Lifestyle choices are not what is fueling high costs in health care.   The United States ranks low in general health indicators, but high in good health habits.  We smoke less, drink less and consume less animal fat that many other countries with better health indicators and much lower health care costs.

  • Businesses can accurately determine their health care costs and are not subject to unanticipated large premium increases.

  • It will reduce labor costs due to a more efficient way of financing health care, eliminating much wasteful administration.

  • Workers' Compensation costs will be reduced, likely by half, due to the fact that everyone has health coverage and there is no need for the medical portion.

  • It reduces the need for part time employees and provides easier recruiting.  There are no pre-existing conditions or Cobra issues.

  • Eliminates the oversight of health benefits and bargaining health coverage with employees.

  • It creates healthier personnel and more stable employees, reduces absenteeism and eliminates employer health coverage complaints.

  • It reduces employee health related debt and personal bankruptcies.

  • It frees up family income that can be spent on other goods and services, thus stimulating the economy.

Tips for Writing Letters to Editor

Follow guidelines for your local paper (word count, submission instructions, etc.)

Frame your letter in relation to a recent news item Use state specific data whenever possible (let us know if you need help finding some!)

Address counter arguments

Be aware of your audience and emphasize how Medicare for All is good for ALL residents of the state

Criticize other positions, not people Include your credentials (especially if you work in the healthcare field)

Avoid jargon and abbreviations

Don’t overload on statistics and minor details

Cover only one or two points in a single letter

Avoid rambling and vagueness

DONATE HERE

Donations to SPAN Ohio help cover operating and lobbying expenses and are NOT tax deductible. To donate, click the DONATE button below. On the page that appears, type in the amount of your donation. If you want your donation to be recurring, check the box where it says "Make this a monthly donation." If this is a one-time donation, leave that box blank.Then click either "Donate with PayPal" (if you have an account) or."Donate with a Debit or Credit Card." Complete the transaction on the page that follows.

Donations to HCFAO go to our education fund and ARE tax deductible. To donate, click the Donate button below. On the page that appears, type in the amount of your donation. If you want your donation to be recurring, check the box where it says "Make this a monthly donation." If this is a one-time donation, leave that box blank.Then click either "Donate with PayPal" (if you have an account) or."Donate with a Debit or Credit Card." Complete the transaction on the page that follows.

UPCOMING EVENTS

  • What is Single Payer Healthcare? Thu. 14 Dec, 2017 (6:30 pm - 7:30 pm) Learn how we can have true healthcare freedom, save money and cover everyone. Champaign County Library 1060 Scioto St, Urb...
  • Region 1 Meeting - Cleveland Mon. 29 Jan, 2018 (5:00 pm - 6:30 pm) North Shore AFL-CIO Office, 3250 Euclid Ave, 2nd floor - Note: enter parking lot from Prospect Ave. Enter building from re...
  • SPAN STATE COUNCIL MEETING Sat. 10 Feb, 2018 (10:00 am - 1:00 pm) First Unitarian Universalist Church of Columbus - 93 W Weisheimer Rd - Columbus OH
  • SPAN ANNUAL STATE CONFERENCE Sat. 28 Apr, 2018 (9:00 am - 3:00 pm) Quest Conference Center - 8405 Pulsar Place - Columbus OH
Add New Event Show Full Calendar