Rising health-care costs mean higher worker contributions

Employees should look for higher deductibles or co-payments for health care.

San Francisco Chronicle

Nearly 60 percent of employers nationwide plan to curb rising health premiums by making their employees pay more, according to a survey released this week by the Mercer consulting firm.

In an effort to reduce costs next year, 59 percent of companies surveyed said they will raise deductibles, co-payments, the share of premiums that employees pay, or out-of-pocket spending limits.

“While some employers are holding down cost growth with innovative methods of improving health-care quality and efficiency, more typically employers struggling with increases they can’t handle resort to the tried-and-true method of shifting cost to employees,” said Blaine Bos, a senior Mercer health and benefits consultant based in Minneapolis.

Continuing efforts by employers to rein in health costs apparently have made a dent. The survey of companies with at least 10 workers showed health costs in 2009 will rise by an average of 5.7 percent, the lowest in more than 10 years.

For the past three years, the growth in health-care costs has hovered at about 6 percent. This follows several years of double-digit premium increases, which spurred employers to begin shifting a greater share of burden onto their employees.

Despite the moderation, premium increases still outpace inflation and workers’ earnings.

“Those premium increases have come down, but bringing down a premium increase is good news and bad news,” said Paul Fronstin, senior research associate with the Employee Benefit Research Institute in Washington. “Premiums are still increasing faster than inflation, and it’s not like premiums have come down.”

Fronstin said raising fees for medical services — doctor visits and drug co-payments — is less onerous on employees than requiring them to pay a greater share of the premium because many workers don’t access health services on a regular basis.

Workers have already been paying more for their health care for years. Between 2003 and 2007, the median family deductible rose from $1,000 to $1,500, the Mercer study showed.

About 19 percent of employers said they plan to offer high-deductible plans with a health savings account in an effort to lower costs. Last year, 12 percent of all employers — and 20 percent of those with 500 or more employees — said they were “very likely” to offer such a plan by 2009.