The rising cost of health
insurance, fueled by increases in medical costs and higher utilization
rates, has employers of all sizes taking a hard look at which
employee benefits to offer and how best to deliver health care
benefits to their employees.
Over the past few
years, employers have been increasing employee contributions at
annual enrollment and increasing employee cost-sharing in the plan
design. These changes have a financial impact on the overall
covered population and an even stronger impact on those who use
the plan most frequently.
The health care
financing system misleads us into believing that a physician
office visit costs $10 or $15, an Emergency Room visit $50, and a
hospital stay no more than $500, when the real prices are many
multiples of the price tags seen by the consumer. In many of
the "consumer-driven" models being introduced today, patients are
exposed to and must pay the real prices for these services.
For example, an
employer purchases a PPO plan with a $1,000 individual deductible
and $2,000 family deductible; the employer funds a health care
account for each employee with $500 for those with individual
coverage and $1,000 for those with family coverage; employees and
dependents use the funds in the account to pay for covered medical
services until the funds are gone; then employees pay for services
from their own pocket until the deductible is satisfied; finally,
the PPO coverage kicks in to pay medical costs for the remainder
of the year. Employers and benefit administrators agree that
employee education and communication will be critical to the
success of these kinds of consumer-driven health plans.
In New Hampshire,
CIGNA HealthCare, Anthem Blue Cross and Blue Shield, and Harvard
Pilgrim Health Care have announced that they will be introducing
consumer-driven plan options in 2005.
In the meantime, at
Granite Group Benefits we are helping employers of all sizes
determine the level of benefits they can afford to offer,
competitive contribution levels in their industry, the best
funding arrangement, and the best carrier/administrator for their
location and situation so that they may continue to attract, retain
and reward their employees.
