Health care cost increases benefits to remain at 6 percent i

 

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Health care cost increases benefits to remain at 6 percent in 2009 WASHINGTON, February 19
Move to Consumer-Directed Health Plans continues, Watson Wyatt / National Business Group on Health Survey Finds

WASHINGTON, February 19 / PRNewswire-FirstCall / - U.S. employers expect cost increases of health care to remain at 6 percent and more are considering adopting consumer directed health plans (CDHPs) in 2010 an effort to control cost increases, according to a forthcoming survey by Watson Wyatt, a consulting firm leader, and the National Business Group on Health, an association of more than 300 mostly large employers, including 64 of the Fortune 100.

The survey of 489 large U.S. employers found that the average increases in health costs expected to remain at 6 percent in 2009, although it is still almost twice the rate of inflation. The increase is the same rate that employers experienced in 2007 and 2008. In 2006, health care costs rose 8 percent.

"Cost increases have stabilized, but the financial crisis is causing many companies to reassess their strategies for health plan," said Ted Nussbaum, group and head of the practice of health care at Watson Wyatt . "Although large-scale change seems unlikely, the economic realities lead companies to adopt strategies that emphasize greater accountability of personal health of their workers."

Just over half (51 percent) of companies now offer workers CDHP, up from 47 percent in 2008. Another 8 percent are expected to adopt a CDHP in 2010. CDHPs are helping employers control costs - companies with at least half of their employees enrolled in a CDHP had a two-year cost trend (4.6 percent) which is 25 percent lower than non-CDHP authors (6.1 per cent). However, challenges remain for employers trying to provide more affordable coverage for their workers.

Two-thirds of employers (67 percent) cite poor health habits of their employees as a challenge in managing their health care costs. Other challenges are under preventive care services (42 percent), the high cost of disaster and end of life (36 percent), and poor understanding of how the employee to use the map ( 30 per cent).

Although companies will pay close attention to benefit of offers because of the recession, most do not foresee major changes. A large majority of employers do not provide delay or cancel their programs (86 percent) or changes in plan design (87 percent).

"Given the current economic climate, costs are clearly high priority for workers and their employers," said Helen Darling, president of the National Business Group on Health. "By promoting a healthy lifestyle for workers, companies can mitigate the cost pressures and build a healthier and more productive. Strong support from senior management and effective communication around these initiatives will help employees to grow more comfortable to take greater responsibility for their health. "

Other preliminary findings from the report include:

      - Nearly one third of employers (30 percent) were able to improve their health
          care strategy, with another 30 percent plan to do so in 2009. A
          smaller number of companies working on plans for mid -
          changes to tenders (13 percent).
      - Employers of confidence in the system of health services remains high,
          if market conditions have caused this feeling of dip. Near
          two-thirds (62 percent) of employers are very confident in their ability
          to provide health services in 10 years, down 73 percent
          year.
      - For employers, the average health expenditure per employee in 2008
          was $ 7173 and should rise to nearly $ 7400 in 2009.
          Employees are paid on average 20 percent of their total medical premiums
          costs in 2008, a number that will probably remain the same in 2009.
The 14th Annual National Business Group on Health / Watson Wyatt report will be published in mid-March.

About Watson Wyatt

Watson Wyatt (NYSE, Nasdaq: WW) is the trusted partner for the world's leading organizations on people and financial issues. The global services include: managing the cost and effectiveness of employee benefit plans, the development of the attraction, retention and reward strategies; advise plan sponsors and retirement of other institutions on the optimization of investment strategies, providing strategic and financial advice to insurance and financial services companies and provide related technology, outsourcing and data services. Watson Wyatt has 7700 employees in 32 countries and is located on the Web at www.watsonwyatt.com.

About National Business Group on Health

The National Business Group on Health is the only nation to non-profit, members of the organization of large employers devoted exclusively to innovative research and cutting-edge solutions to their most important health care and related benefits issues. The NBGH identifies and shares best practices in health benefits, disability, health and productivity, holidays and work-life balance issues. NBGH members provide health coverage for more than 50 million American workers, retirees and their families. For more information on NBGH visit www.businessgrouphealth.org.

SOURCE Watson Wyatt

CONTACT: Steve Arnoff of Watson Wyatt, +1-703-258-7634, or steven.arnoff @ watsonwyatt.com Ed Emerman for Watson Wyatt, +1-609-275-5162, eemerman@eaglepr.com

Copyright © 2009 PR Newswire Move to Consumer-Directed Health Plans continues, Watson Wyatt / National Business Group on Health Survey Finds WASHINGTON, Feb.