Soaring healthcare costs challenge providers
YARMOUTH, Maine - It's open season on employee benefits and, not surprisingly, a whopping 93% of providers say their insurance premiums will increase for 2010, according to the latest HME NewsPoll.
"Our premium cost literally doubled for 2010," said one provider.
Most increases won't be as dramatic. A majority of respondents, 47%, expect their premiums to rise between 11% and 20% compared to 2009. Twenty-five percent said premiums will increase more than 20%, and 28% said they will increase less than 10%.
Providers aren't strangers to skyrocketing premiums.
"Every year, the increases have been 13% to 22%," said one provider. "We capped the organization's portion in 2003 and all increases have been passed onto the employee since then."
Other ways providers have tried to rein in insurance costs: increase deductibles and co-pays; shop around for better rates; and reduce coverage.
"We will be dropping dental and vision," said one provider. "Employees are going to have to pay a higher percent, as well. It's not what we wanted to do, but we have little choice."
Some companies are taking a more proactive approach.
"We have programs promoting illness prevention and there will be more next year," said one provider. "We are 40% employee owned, so we have a presence in all of the company decisions. I think our company is doing a great thing to keep our insurance within perspective."
Many providers offer flexible spending and health savings accounts, both tax-advantaged plans that allow employees to have money deducted from their paychecks for health-related expenses.
"We went to an HSA-type plan and the money we save each year is plowed back in toward reducing the premiums," said one provider. "Our employees like it and we are happy with it."
Whatever steps providers are taking, it seems to be working for the most part. Only 17% of providers said healthcare costs eat up more than 20% of annual earnings. Most, 44%, said it's less than 10% and the rest, 37%, say it's between 11% to 20%.
In an industry where companies often work both sides of the fence--as consumers and as providers of reimbursed services--one provider pointed out an unpleasant irony.
"Not only are my healthcare costs increasing," he wrote, "but the same carrier is lowering my reimbursement."