HEALTH CARE Poll: Workers likely to shoulder more costs

Some employers could drop health-care coverage, one consultant said.
NEW YORK (AP) -- Employers are facing continued double-digit increases in health-care costs in 2005 and likely will require their workers to pay an even greater share of the bill, according to a new survey of more than 900 companies.
The survey, released Thursday by Mercer Human Resource Consulting, found that employers expect health-care costs to rise 12.9 percent on average next year if they leave benefits unchanged. But companies that participated in the survey, both those that buy insurance and companies that are self-insured, are only budgeting an average increase of 9.6 percent in their health-care spending.
The companies are likely to shift much of the difference to employees in the form of higher required contributions and co-payment fees, or by limiting their choice of insurance plans, the report said.
Third year in a row
That would mark the third consecutive year that employers have shifted a portion of health-care costs to workers to try to keep pace with rapidly rising expenses.
Mercer said employers forecast a 13-percent increase in health costs in 2004 and ended up paying about 10 percent more, chiefly because employees were asked to pick up more of the tab.
Smaller employers, faced with an average 13.4-percent increase in health expenses next year if they maintain the status quo, will likely shift a large share of the burden to workers, said Blaine Bos, a Minneapolis-based health-care consultant for Mercer. Some employers could drop health-care coverage altogether, he said.
Many employers have already set their health-care budgets for next year, but it is too soon to know precisely how they'll bridge the gap between inflation and their spending plans, Bos said. A significant part of the gap will likely be filled by cost shifting, but employers may also be able to reduce their expenses by taking advantage of surplus capacity among health-care providers in some markets that could create competition. Some also have started disease management programs in recent years that are starting to yield savings.
Same factors
But the factors driving up the cost of health care haven't changed. The general aging of the population means more workers and their insured dependents need more health-care services. They're tapping into a range of new drugs and health-care technology, but that is driving up costs as health-care companies charge high prices to recoup the money of research and development.
Health-care inflation is acute in some regions with less and less competition, a result of consolidation by hospitals, medical practices and health plans, Bos said.
The Mercer survey collected data from 916 employers of varying size. It was done over the Internet and by mail, with most of the data collected in July and August. The results are preliminary -- the company expects to compile results from about 3,000 employers by the end of the year. Bos said he expect results in the full survey to echo the figures supplied by the first group of employers.