News In Healthcare

Accord­ing to a recent report by Price­Wa­ter­house­C­oop­ers, employ­ers who don’t change the health plans they are cur­rently offer­ing to their employ­ees will face cost increases of between 10 per­cent and 12 per­cent in 2007.  As explained in the San Diego Union-Tribune, med­ical costs are grow­ing faster than wages.   Many employ­ers are already tak­ing action by chang­ing employee health ben­e­fit pack­ages, shift­ing more costs to its employ­ees.  Some employ­ers are intro­duc­ing well­ness pro­grams in order to try to keep their work­force healthy and keep costs down.  Mov­ing a work­ers from a high-risk cat­e­gory to a lower-risk cat­e­gory can bring annual health­care expenses down by as much as $3,000.  Also to incen­tivize employ­ees to take bet­ter care of them­selves and spend more wisely, HMOs have increased their deductibles by as much as 42%. 

An arti­cle in the NY Times today dis­cusses the chance some­one takes when choos­ing between tra­di­tional health cov­er­age or cov­er­age under a consumer-directed health plan.  Which one is going to pay off in the long run?  What are the odds that you or a depen­dent will become severely injured or ill dur­ing the next 12 months?  Do you play it safe and pay a higher monthly pre­mium so that way you have a lower deductibe and cov­er­age from the start?  Or, do you play your odds and go with the lower monthly pre­mi­ums and a higher deductible, in excess of $1,000, and hope that you will only see a doc­tor for your annual check-up?  Mil­lions of work­ers are get­ting ready to make these types of deci­sions as open enroll­ment sea­son begins.  Get ready to roll the health­care dice!

A study pub­lished by Health Affairs ear­lier in 2006 is now avail­able online.  The report details early find­ings that con­sumer dri­ven health care is hav­ing an effect on low­er­ing costs and low­er­ing cost increases. 

More and more employ­ers are switch­ing health plans and begin­ning to offer their employ­ees HSA com­pat­i­ble plans.  What this means is that the employee will have a min­i­mum out-of-pocket expense of $1,050 (sin­gle cov­er­age) and $2,400 (fam­ily cov­er­age).  The Char­lotte Observer recently reported that as the 2007 open-enrollment sea­son begins, it is expected that more employ­ers will be offer­ing employ­ees health sav­ings accounts.  Most notably, Bank of Amer­ica and Wal-Mart will offer HSAs to its employ­ees for the first time in the com­ing weeks.  The Dal­las Morn­ing Star also reported on the increase offer­ing of HSA plans in 2007 but noted that con­sumer edu­ca­tion about the plans must be increased before HSAs truly catch on.

A study just released by the Kaiser Fam­ily Foun­da­tion sug­gests that low-income fam­i­lies will not ben­e­fit from the con­sumer dri­ven health prod­ucts being pro­moted by Pres­i­dent Bush as the answer to the health­care cri­sis.  Because of the high deductibles, low-income fam­i­lies can­not afford the upfront costs nor do they ben­e­fit from the tax advan­tages of the HSA.  For more infor­ma­tion, see http://www.kff.org/uninsured/upload/7568.pdf.