Providers wince at insurance expenses
It’s that time of year when many businesses scrutinize annual budgets line by line to see where they can cut costs. The biggest expense: employee health insurance.
“We’re forecasting another increase this year,” said provider Steve Treinen, director of Banner Home Care in Gilbert, Ariz. “We will work with absorbing it.”
He may be in the minority. A survey released in September by Mercer Consulting, a human resources firm, showed that 59% of employers planned to pass on average cost increases of 5.7% to employees in the form of higher deductibles, increased co-pays or out-of-pocket spending limits.
Throw in a planned 9.5% reimbursement cut and a 36-month cap on oxygen and providers like Mike Kuller, president of Allstar Oxygen Services in Concord, Calif., say they will have to spread the pain to employees.
“Probably after the first of the year, we’ll have everybody pay 50% of their insurance,” he said.
“They used to pay 20%. It’s basically a reduction in pay.”
While shifting costs onto employees is one way to control costs, in the long-term, it won’t solve anything, said Will Foudy, president-elect of the National Association of Insurance and Financial Advisors.
“If anyone is going to be successful in addressing the true cost of health care, they have to get to the fundamental cause of what’s driving that cost,” he said. “What we are trying to do is look at disease prevention programs-smoking cessation, weight loss, the list goes on and on.”
Shield Healthcare has implemented several popular wellness initiatives. While employees have seen some positive effects on a personal level-fewer trips to the doctor or cutting back on certain medications-Shield has yet to realize any tangible savings, said Jennifer Puleo, vice president of human resources for the Valencia, Calif.-based provider.
“When it comes to the bottom line, the reductions are not there yet,” she said. “Ultimately, we may need to come up with a different strategy of insuring employees.”