Workers Pay More For Health Care: Employers Shift Costs Of Insurance Or Reduce Benefits Amid Rising Premiums

About two in 10 employers nationwide have reduced health benefits or increased the amount workers pay for medical coverage this year because of the ailing economy.

And this financial squeeze on many working Americans probably won't be ending.

A national survey released Tuesday reveals that 41 percent of companies say they're "very likely" or "somewhat likely" to increase the amount workers contribute toward health-insurance premiums in 2010.

Those are among the findings in the annual employer health benefits survey by nonprofit research groups Kaiser Family Foundation and the Health Research & Educational Trust.

"Rising health-care costs are always much more painful in a bad economy," said Drew Altman, president and chief executive of Kaiser Family Foundation. " . . . Having to pay a higher deductible or increasing out-of-pocket costs really puts a burden on the other bills that people have to pay."

From 1999 to 2009, the average amount workers paid for family coverage increased about 128 percent, while their wages increased only 38 percent.

As the debate around national health reform continues, American workers have watched the

amount coming out of their paychecks for insurance premiums jump from $1,543 in 1999 to $3,515 this year for family coverage, the survey found.

The total average premium increased from $2,196 to $4,824 for single coverage and from $5,791 to $13,375 for family plans during the past decade.

Next year, average premiums will increase almost 6 percent after coverage changes, according to preliminary results released this month by national consulting firm Mercer.

Nearly two-thirds of businesses are asking workers to pay a higher portion of the monthly premium or more out of pocket next year when they use medical services, according to Mercer.

With the sputtering economy, many Ohio businesses say they can't afford even modest premium increases, said John Sinclair, principal and office leader of Health and Benefit Services for Mercer in Cincinnati.

"Most of our clients are shifting costs very, very aggressively," he said. "They're saying, 'I can't absorb any more costs over last year.' "

Premiums increase

The Akron accounting firm Bober, Markey, Fedorovich & Co. recently was told its insurer wants to raise the annual premium about 60 percent next year, partner Richard Fedorovich said.

The business already faced an initial premium hike of 60 percent this year because four of its 65 employees have medical problems that require costly procedures or treatments, he said.

The firm managed to keep the premiums lower this year by switching to a new insurer and adopting a complex plan with higher deductibles and out-of-pocket charges, he said.

"We don't like doing that, but whether it was looking at it from the standpoint of the employer or employee, it just didn't feel like either one of us was willing to absorb that much of an economic hit," said Fedorovich, who is chairman of the board at Akron General Health System.

Coverage decreases

A few small businesses in the area have opted to only cover employees, not spouses or dependents, or drop coverage altogether, said Martin Hauser, president of Akron-based SummaCare. "We are seeing smaller employers drop coverage and say, 'I can't even afford it at all,' " he said.

About half of SummaCare's employer groups now have deductibles of $1,000 for individuals and $2,000 for families, he said.

Roughly 40 percent of workers at businesses nationwide with fewer than 200 employees this year must pay at least $1,000 in out-of-pocket costs in most cases before their insurance will start paying for their medical bills, the Kaiser survey found.

Last year, only about 35 percent of small-business employees faced these large deductibles.

Wellness initiatives grow

Along with shifting more cost to workers, companies increasingly are embracing wellness initiatives to lower medical bills.

The Kaiser survey found 57 percent of all firms that provide health insurance offer at least one wellness program -- items such as gym membership discounts or on-site exercise facilities, weight loss and smoking cessation programs and Web-based health resources.

More companies also are offering financial incentives for nonsmokers, said Dr. David Epstein, market medical executive for Cigna Health Care Great Lakes region.

"We're probably looking in the not-too-distant future of having other conditions included," he said.

Main Street Gourmet in Cuyahoga Falls is among the companies to adopt wellness initiatives.

The muffin and baked goods maker offers discounts worth several hundred dollars off workers' share of the annual premium for nonsmokers and those who agree to participate in a quit-smoking program, said human resources administrator Phil Plumley.

Main Street Gourmet has bikes available for its 90 workers to use, as well as walking clubs, an on-site exercise room, organized sports and healthful recipe contests, he said.

The company also works with its insurer, SummaCare, to offer on-site informational lunch talks and an annual health fair.

Those efforts are having some sweet results.

The company hasn't had any workers requesting larger uniform sizes for the past couple years, Plumley said. And during that same time, about 10 workers have actually dropped pant sizes.

"You try to get them to make good choices, in terms of diet and exercising a little more often," he said.

Cheryl Powell can be reached at 330-996-3902 or chpowell@thebeaconjournal.com.