As Employers Cut Health Care Costs, Employees Increase Utilization
Survey by International Foundation Reveals Recession’s Impact on Health Plans
Brookfield, WI—A recent survey by the International Foundation of Employee Benefit Plans shows the recession is forcing employers to increase cost-sharing approaches. Plan participants are using their benefits—while they still have them.
“Plan participants are feeling anxious about the possibility of increased cost-sharing and a reduction in benefits due to the financial crisis,” said Sally Natchek, CEBS, senior director of research for the International Foundation. “These fears are not unfounded.”
Survey responses indicate that while few plan sponsors (3.6%) are cutting or considering cutting health care benefits altogether, many are ramping up their cost-sharing approaches. Thirty-five percent of plan sponsors are increasing employee deductibles, coinsurance or copays due to the financial crisis. Nearly the same proportion are also increasing employee premiums. Other cost-sharing actions that plan sponsors are taking include adding consumer-driven health plans as an option (12.8%), replacing a current plan with a consumer-driven plan (9.6%) and instituting spousal charges (10.8%).
Plan sponsors aren’t the only ones reacting to the recession. Survey respondents are reporting that plan participants, perhaps fearing an impending layoff, are increasing utilization of their benefits. About one-third of plan sponsors have noticed an increase in the number of participants filling prescriptions and engaging in costly medical procedures before their insurance runs out. Twenty-four percent of plan sponsors have observed growth in the number of participants adding dependents to their plans. At the same time, 17.8% of plan sponsors have introduced or are considering dependent eligibility audits.
Even those who are hanging onto their jobs are struggling with health care costs. About one-fifth of survey respondents report plan participants are delaying medical care and skimping on prescription drugs because of financial problems.
“The financial crisis has led some to conclude that health care and the economy are inextricably linked. You can’t separate one from the other,” said Natchek. “Given the burden of growing health care costs, it’s likely that health care reform will continue to be at center stage. Eighty-five percent of responding plan sponsors believe that the financial crisis has made major federal reforms more likely.”
The upside of today’s climate is a heightened focus on wellness programs. Eighteen percent of the respondents have introduced or are considering introducing wellness initiatives due to the economy.
The survey of International Foundation of Employee Benefit Plans members was conducted March 30-April 6. Respondents include corporate plan sponsors, public/governmental plans, multiemployer benefit funds and others with benefit plans.
Health Care Plans: Impact of the Financial Crisis (Item #6696E) is published by the International Foundation of Employee Benefit Plans. Members of the International Foundation receive the survey results free of charge. Nonmembers can purchase the survey for $50. To order visit www.ifebp.org/books.asp?6696E or contact the Foundation Bookstore at bookstore@ifebp.org or (888) 334-3327, option 4.
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