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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.
Mass Overhaul.
Huff, Charlotte; Workforce Management; v91 no3 pp 32-34, 36, 38, 40 Mar 2012; journal article
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Massachusetts led health care reform with its 2006 state law that by 2010 had expanded coverage to 98.1 percent of residents. But the cost of health care in the state continues high, leading many employers to self fund and prompting stakeholders to push for further reform. Employers and insurers are targeting the cost differences between care providers and moving toward pricing tiers, not only for drugs but also for physicians and hospitals. Employees, such as those at Boston's Beth Israel Deaconess Medical Center, are being shown actual price differences between providers and asked to choose between unlimited access to any provider for a high premium or restriction to less expensive service providers for a more modest user cost. In 2012, nearly one in five of the employees chose the limited two tiers. The state's experience with health care and insurance reform illustrates the complexity of the problem, the need to reevaluate progress and to modify the plan as necessary.
[0161853]
Can the Rapid Growth in the Cost of Employer-Provided Health Benefits Explain the Observed Increase in Earnings Inequality?
Warshawsky, Mark J.; BNA's Pension & Benefits Reporter; v39 p 262 Feb 7, 2012; journal article
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Abstract :
The gap between lower and higher incomes is expanding, and with earnings growing slowly relative to rising health care costs, individuals receiving lower compensation are more severely affected by medical costs than those at higher compensation levels. Growth in actual earnings, the amount remaining after health care benefit costs are deducted, has lagged behind compensation growth, especially for those at lower income percentiles. The inequality in earnings reflects the rapid rise in health insurance costs, but inequality in compensation has not changed significantly. Legislative proposals and policies, including the health care reform law, have been made to address the gap, but much remains to be done to address earnings inequality as affected by health care benefits.
[0161711]
Expenditure Patterns of Older Americans, 2001-2009.
Banerjee, Sudipto; EBRI Issue Brief; no368 pp 1-25 Feb 2012; journal article
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Results of the Consumption and Activities Mail Survey document the decline in household expenditures with rising age. Analysis of data finds that household expenditure at age 75 is 81 percent of that at age 65, at age 85 it is 66 percent of that at age 65, and at age 95 it is 48 percent of that at age 65. On average, home and home-related expenses account for the largest portion of household spending for persons over age 50, with 40-45 percent of their budgets going to such expenses. Health expenses are the second largest portion, accounting for 10 percent of the budget of those age 50-64, rising steadily to 20 percent of the budget of those age 85 or older. On average, single persons, African-Americans and high school dropouts have expenditures that exceed their income, and they tend to have little financial wealth.
[0161755]
The Financial Burden From Prescription Drugs Has Declined Recently for the Nonelderly, Although It Is Still High for Many.
Gellad, Walid F.; Donohue, Julie M.; Zhao, Xinhua; Zhang, Yuting; Banthin, Jessica S.; Health Affairs; v31 no2 pp 408-416 Feb 2012; journal article
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Examination of the Medical Expenditure Panel Survey reveals trends in the proportion of family income spent on out-of-pocket drug expenses and the proportion of out-of-pocket health expenses spent on drugs. In 1999, 2.9 percent of Americans lived in families spending over ten percent of family income on drugs. By 2003, this percentage rose to 4.3, but by 2008 it had dropped to 3.1 percent. Over one in four people in 1999, 26.7 percent, lived in families that accounted for more than half of out-of-pocket health care spending, rising to 33.6 percent in 2003 and sliding to 25.4 percent in 2008. Those with public or nongroup insurance were more likely to have a higher drug cost burden, as were those with chronic conditions.
[0161803]
Growth in US Health Spending Remained Slow in 2010; Health Share of Gross Domestic Product Was Unchanged From 2009.
Martin, Anne B.; Lassman, David; Washington, Benjamin; Catlin, Aaron; Health Affairs; v31 no1 pp 208-219 Jan 2012; journal article
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In 2009 and 2010 health care expenditures rose only 3.8 percent and 3.9 percent, respectively, an unusually slow rate. As a share of gross domestic product, health spending stabilized at 17.9 percent. Utilization figures from 2007 to 2009 were less than half those for 2000 to 2006. The effect of the recession lingered in 2010 when slow growth in the use and degree of medical services drove reduced growth in overall personal health care spending. Consumers chose not to pursue care or used less costly alternatives. Cost increases for hospital care, physician and clinical services, prescription drugs, Medicare, Medicaid and private health insurance slowed. The share of costs borne by state and local governments, businesses and households dropped as the federal government assumed a much higher share.
[0161706]
Paystub Life Buoys: Benefits for the Other 99%.
Bell, Allison; National Underwriter: Life & Health; v116 no1 pp 58-61 Jan 2012; journal article
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As the cost of traditional comprehensive health insurance rises, it may be losing support to a raft of voluntary benefits. Voluntary and worksite benefit sales grew three percent in 2009, lost most of that in 2010 and rose five percent in the first three months of 2011. Insurers note more employer interest in purely voluntary products or subsidizing voluntary benefit choices. Changes are being driven by rising health care costs, the weak economy, interest in niche benefits and ease of payment processing. The Patient Protection and Affordable Care Act is a major driver, with cost requirements seen as opening opportunities for new entrants in the voluntary benefit arena. The industry should fend off any claims that voluntary benefits are misleading or too narrow by ensuring that consumers fully understand benefits' scope and limits.
[0161745]
Shedding Weight of Workplace Health Risks.
Brown, Sue; Canadian HR Reporter; v24 no22 pp 15, 18 Dec 19, 2011; journal article
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Abstract :
Statistics Canada reports that 62 percent of Canadian workers are overweight or obese, making employee health a serious risk management issue for employers. These workers are disproportionately likely to be absent, generate disability and medical costs and be less engaged and productive at work. Employers can offer a variety of programs and tools to help employees manage their weight in a healthy way, including group and personal challenges which can boost morale and team spirit. Employee assistance programs and plan vendors may provide educational sessions and personal coaching. Technology can help through online progress tracking systems and simple pedometers, and workplace meetings can provide support. The Canada Standards Association and Bureau de Normalisation du Quebec established the Healthy Enterprise standard to focus on promoting employee health in the workplace.
[0161504]
Health Care Costs: Survey Finds Average Health Care Premiums Expected to Exceed $10,000 Per Employee.
BNA's Pension & Benefits Reporter; v38 p 1861 Oct 11, 2011; journal article
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An Aon Hewitt survey says that for the first time health care premiums are likely to exceed $10,000 per employee at large companies in 2012. Average premiums are projected to rise 7.0 percent in 2012, compared to 7.5 percent in 2011. Employees will have to contribute 22 percent of total premiums, or $2,306. According to Aon Hewitt executive vice president John Zern, employers cannot afford to shoulder 7.0 percent annual cost growth in uncertain economic conditions.
[0161109]
The Growth in Cost Per Case Explains Far More of US Health Spending Increases Than Rising Disease Prevalence.
Roehrig, Charles S.; Rousseau, David M.; Health Affairs; v30 no9 pp 1657-1663 Sep 2011; journal article
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Researchers looking at the increase in health care spending found it due in part to the fact that more people are being treated for disease, rather than to a growing prevalence of disease. Health expenditures were examined from 1996 through 2005, analyzing by population group and medical condition. It was found that, while the rates of disease for seven conditions analyzed, whether treated or not, varied between -0.4 percent and 2.9 percent over the time studied, the proportion of treated disease rose dramatically. While the prevalence of those with a disease being treated accounted for one-fourth of the health care spending increase, three-fourths of the increase reflected the growth of cost per case. The results have policy implications indicating the need to lower the rate of cost growth per case.
[0160961]
National Health Spending Projections Through 2020: Economic Recovery and Reform Drive Faster Spending Growth.
Keehan, Sean P.; Sisko, Andrea M.; Truffer, Christopher J.; Poisal, John A.; Cuckler, Gigi A.; Madison, Andrew J.; Lizonitz, Joseph M.; Smith, Sheila D.; Health Affairs; v30 no8 pp 1594-1605 Aug 2011; journal article
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Projections based on the 2011 Medicare Trustees Report and updated macroeconomic data show health spending growth at 8.3 percent when provisions of the Patient Protection and Affordable Care Act (PPACA) significantly expand coverage. Demand for health care is projected to rise, especially for prescription drugs and physician services. Increased Medicare and Medicaid enrollment as the Baby Boom generation ages and federal insurance exchange subsidies are projected to increase the federal government's share of health spending from 27 percent in 2009 to 31 percent in 2020. Average annual growth after the passage of the PPACA is expected to be 5.8 percent, up from 5.7 percent before the Act.
[0160857]
The $19,393 Question: How Do We Slow the Rise of Health Care Costs?
Thompson, William J.; Broker World; v31 no6 pp 10, 12, 74 Jun 2011; journal article
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According to the Milliman Medical Index, an average family pays $19,393 for health care through a preferred provider organization in 2011, a 7.3 percent jump over 2010. The figure reflects only medical care, not administrative expenses, and varies by city. The major reason for health care reform is to stem the rise in costs, the result of basic unit costs and amount of utilization. The Patient Protection and Affordable Care Act (PPACA) has provisions to influence minimum coverage, premium rates, required benefits, health insurance exchanges and medical loss ratios. While these elements may contribute to overall costs, they have little effect on the overall cost of care. Employers need to focus on the real cost drivers and target more efficient use of health care to achieve real cost control. Brokers should serve as trusted advisors to help client employers understand how the PPACA affects them and how to best get a handle on rising costs.
[0160437]
Health Care Costs: Medical Costs Forecast to Increase 8.5 Percent in 2012, PwC Study Says.
Hansard, Sara; BNA's Pension & Benefits Reporter; v38 p 986 May 24, 2011; journal article
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PricewaterhouseCoopers projects health care costs to rise 8.5 percent in 2012, exceeding the 8.0 percent estimate for 2011. But employers' actions to change plan design should hold the increases to about 7.0 percent. The main drivers fueling the increases are consolidations between physicians and hospitals, shifting costs by Medicare and Medicaid and employees' higher utilization of health care services. Shrinking Medicare and Medicaid payments result in greater expense burden for private insurance. To cope with the rising costs, employers are continuing to require employees to contribute at higher levels. High-deductible plans with lower up-front costs are gaining traction. Looming mandates from the Patient Protection and Affordable Care Act, most effective in 2014, are prompting employers to plan for further changes, and insurers offering initiatives and innovations will likely enjoy a strong market share.
[0160311]
Employers Accelerate Health Care Cost-Shifting.
Geisel, Jerry; Business Insurance; v45 no21 pp 4, 21 May 23, 2011; journal article
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While many employers have avoided increases in health insurance premiums, they have shifted costs by raising deductibles. In 2011, 22 percent of employers imposed $1,000 or higher deductibles for in-network service for their most popular plans, up from 16 percent in 2010. Similar deductibles were twice as common for out-of-network service. PricewaterhouseCoopers found 17 percent of plan sponsors reporting the strongest enrollment in high-deductible plans, up from 2010's 13 percent, while 57 percent reported their highest enrollment in traditional plans, down from 63 percent in 2010. Costs are rising from greater demand for services and provider consolidation, while the availability of more drugs as generics is softening increases somewhat. Nine in ten sponsors report being financially hit by covering employees' adult children, and 35 percent expect to feel fallout from the 40 percent excise tax on Cadillac plans.
[0160304]
Health Care: Employers Paying Shrinking Share of Workers' Health Care Costs, Milliman Says.
Daily Labor Report; no92 p A7 May 12, 2011; journal article
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As health care costs have risen, employer contribution to those costs, as a percentage of the total, has dropped. The Milliman Medical Index shows employers paid 58.7 percent of the costs for a family of four for care through a preferred provider organization in 2011, a drop from the 2006 rate of 62.5 percent. Coverage costs for a typical family rose 7.3 percent from 2010 to 2011. The employee bore a 9.2 percent increase, compared with the employer's cost increase of 6.0 percent. Outpatient facility costs rose ten percent, almost entirely due to higher unit costs for services rather than increased utilization. Inpatient and pharmacy costs rose 8.6 and 8.0 percent respectively. Among 14 cities studied, health care costs were highest in Miami.
[0160269]
Don't Just Take Their Word For It: Find Right Health and Productivity Management.
Ungvarsky, Mark; Benefits Magazine; v48 no5 pp 34-38 May 2011; journal article
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International Foundation of Employee Benefit Plans
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Health and productivity management programs teach healthy behaviors and give support to the sickest participants, controlling employer costs due to health care and lost productivity. For a health and productivity management program to work, employers need to identify the sources of increased health care costs. This should include not just sources of direct health costs, but also absenteeism and productivity loss. Programs create cost data using claims information and employee health assessments. They then identify groups with chronic or serious conditions to focus on. To get the most out of their programs, employers must work with vendors to design the program and encourage as much employee participation as possible.
[0159993]
Link To Full Article
Health Care Costs: High-Deductible Plans Reduce Spending, Result in Less Preventive Care, Study Says.
Brandolph, David B.; BNA's Pension & Benefits Reporter; v 38 p 628 Mar 29, 2011; journal article
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A RAND Corp. study of families insured through 53 large employers during 2004 and 2005 found that those enrolled in high deductible or consumer driven health plans spent an average of 14 percent less than those enrolled in conventional plans during their first plan year. The reduced spending only manifested for those with deductibles of $1,000 or more. However, preventive care use for families with high deductible plans decreased, even if participants did not need to pay toward the deductible to receive such care. The lower spending was due to lower growth in inpatient, outpatient and prescription drug costs. Among the preventive services high deductible plan families did not use were child immunizations and cancer screenings.
[0160038]
Employer Costs for Employee Compensation: December 2010.
U.S. Department of Labor: Bureau of Labor Statistics: News; no11-0304 pp 1-23 Mar 9, 2011; journal article
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For December 2010, the cost of employee total compensation in private industry averaged $27.75 per hour, with wages and salaries being $19.64 or 70.8 percent and benefits accounting for $8.11 or 29.2 percent. State and local government employee costs were $40.28 per hour. Paid leave in the private sector averaged $1.89, ranging from $4.17 or 8.4 percent for professional and managerial occupations, to $0.59 or 4.3 percent for service workers. The mean cost for union members' leave benefits was $2.77, compared with $1.79 for nonunion members. Paid leave costs were relatively high in the information technology and goods producing sectors and firms with 500 or more employees.
[0160330]
Lack of Access Due to Costs Remains a Problem for Some in Massachusetts Despite the State's Health Reforms.
Clark, Cheryl R.; Soukup, Jane; Govindarajulu, Usha; Riden, Heather E.; Tovar, Dora A.; Johnson, Paula A.; Health Affairs; v30 no2 pp 247-255 Feb 2011; journal article
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Health care access trends in Massachusetts both before and after 2006 health reforms in the state have been analyzed to evaluate the reforms' effectiveness in improving access to care. All demographic groups except non-Hispanic blacks saw a statistically significant reduction in noninsured rates after the reforms. Only 7.2 percent of Massachusetts residents had unmet medical needs due to cost in 2008, compared to 9.6 percent in 1996. Hispanics, non-Hispanic blacks, middle income earners and those in poor or fair health saw no significant reduction in unmet needs. The prevalence of some preventive screenings improved after the reforms. This study suggests that there are certain vulnerable groups in Massachusetts whose needs are not being addressed by the 2006 reforms.
[0159825]
Nearly Half of Families in High-Deductible Health Plans Whose Members Have Chronic Conditions Face Substantial Financial Burden.
Galbraith, Alison A.; Ross-Degnan, Dennis; Soumerai, Stephen B.; Rosenthal, Meredith B.; Gay, Charlene; Lieu, Tracy A.; Health Affairs; v30 no2 pp 322-331 Feb 2011; journal article
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In a survey of families with chronic conditions, 48 percent of those enrolled in a high deductible health plan reported at least one measure of financial burden, compared to 21 percent of those in a traditional health plan. Among families with an income less than four times the poverty level the incidence of financial burden was higher and out-of-pocket expenses were higher than for higher income families. Many policymakers see high deductible plans as a way to provide affordable care to more people, but this survey suggests that they may create more financial burden than traditional plans.
[0159820]
Surveys Predict Health Care Costs Will Rise 8.2 to 12.7 Percent in 2011.
Managing Benefits Plans; no13-2 pp 1-7 Feb 2011; journal article
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Hewitt Associates forecasts an average increase of 8.8 percent for group health insurance premiums in 2011, with the average employee contribution rising 12.4 percent over 2010's rate and average out-of-pocket costs up 12.5 percent. Towers Watson expects a 8.2 percent rise in costs, prompting about six in ten sponsors to plan design changes in 2011 and even more in 2012. The Segal Co. affirms continuing cost increases, partly due to compliance with the Patient Protection and Affordable Care Act, but slower rate increases in high deductible plans due to reduced utilization of services. Mercer anticipates a ten percent rise in employer costs, though effective changes can hold the increase to 6.4 percent. The surveys pointed to cost drivers being higher claims costs, older claimants, cost transfers in the wake of Medicare cutbacks and health reform mandates.
[0159866]
Who Tries to Find Objective Information on Health Care? Findings From the 2010 Health Confidence Survey.
Fronstin, Paul; EBRI Notes; v32 no2 pp 2-7 Feb 2011; journal article
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For the first time in 2010, the EBRI/MGA Health Confidence Survey asked questions about whether individuals had tried to find objective information about the advantages and disadvantages of different treatments and the costs, skill, performance and disciplinary history of doctors and hospitals. Overall 45 percent of respondents tried to find out about the advantages and disadvantages of different treatments, about a quarter tried to find cost information, and only 14 percent tried to find out about disciplinary actions against hospitals and doctors. Younger individuals were more likely to seek information than older individuals, minorities and lower income persons were more likely to seek cost information, and more educated persons were more likely to seek information about the pros and cons of different treatments and information about a doctor's training and experience. The uninsured were more likely to seek cost information, and other aspects of health coverage affected various types of information seeking.
[0159792]
Projecting the Impact of the Affordable Care Act on California.
Long, Peter; Gruber, Jonathan; Health Affairs; v30 no1 pp 63-70 Jan 2011; journal article
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The Patient Protection and Affordable Care Act (PPACA) has radically changed health insurance. Modeling suggests that the total number of uninsured in California will drop 3.4 million as a result of the PPACA. While the number of persons with employer sponsored and traditional nongroup health insurance is projected to decrease, 4.0 million are expected to participate in California's new health insurance exchange and 1.7 million more will acquire public health insurance. Households with incomes less than 133 percent of the poverty level will see over $1,000 in savings in 2016, but households with incomes four or more times the poverty level will have higher total health care costs.
[0159692]
The Price Is (Not) Right.
Marlo, Karen; Stavisky, Adam; Employee Benefit News; v25 no1 pp 22-23 Jan 2011; journal article
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A survey from the National Business Group on Health and Fidelity Investments examines the breadth of and employer investment in employee health improvement. On average, the 121 large employers surveyed have invested in 21 different programs from several different vendors. Only 35 percent of surveyed employers have measurable goals or targets for their health improvement programs, with 42 percent relying on vendor assessments to measure product success. The survey also found that employers underestimated their investment in health improvement, which the study estimates at 1.8 percent of total health claims cost.
[0159651]
National Survey of Employer-Sponsored Health Plans.
52, 48 pp 2011; book
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The average per-employee cost for health care benefits rose 6.9 percent in 2010, the biggest increase since 2004. Increases ranged from 8.5 percent for large employers to 4.4 percent for small employer. The average benefit cost per employee was $9,562. Overall enrollment in consumer-directed health plans was 11 percent in 2010. Enrollment in HMOs, now the most costly plan type, averaged $8,892 per employee. Per-employee costs for PPOs averaged $8,781, while HSA-eligible CDHPs averaged $6,759.
[0160091]
Managed Care: Employers Shift Away From HMOs as Rate Premiums Climb, Aon Hewitt Says.
Hansard, Sara; BNA's Pension & Benefits Reporter; v37 p 2633 Dec 7, 2010; journal article
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An average 9.8 percent premium increase is set for health maintenance organizations for 2011, according to an Aon Hewitt survey. This is the highest jump since 2006 and compares with an 8.5 percent increase for PPOs and point of service plans. Responding to the trend, employers are moving away from HMOs, offered by 58 percent of employers in 2007 but only 47 percent in 2010. As other plan options become available, people with higher utilization rates stay with HMOs, driving up costs. The survey found employees are being asked to take on higher copayments, though drug plan designs and cost sharing have changed little.
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