HRMorning.com » Companies reveal plans for capping health costs

Companies reveal plans for capping health costs

September 10, 2008 by Jim Giuliano
Posted in: In this week's e-newsletter, Latest News & Views, Money, policies


If you’re looking to benchmark your approach to keeping a lid on company health costs, take a look at the details from a survey asking 3,000 HR managers what tactics they’re planning.

The survey was conducted by the Mercer consulting firm. Here’s a compilation of the responses (the numbers add up to more than 100% because some companies are trying more than one approach):

  • 59% said they intend to keep down rising health care costs in 2009 by raising workers’ deductibles, copays or out-of-pocket spending limits.
  • 47% are encouraging enrollment in plans with lower premiums and higher deductibles.
  • 19% will start offering a consumer-directed health plan — a high-deductible plan with employee-controlled spending accounts. They encourage employees to save account money by shopping for the best health bargains; the employees can keep the savings for future needs. That’s up from last year’s figure of 12% who said they were very likely to adopt a consumer-directed plan.

More from the study:

  • On average, health care costs will go up by an estimated 5.7% next year for workers and their employers. That’s the same as this year’s 5.7%  and slightly less than the 6.1% jump in 2007.
  • During that same period, wage increases have averaged slightly under 4%.
  • In the last five years, the average health-plan deductible for an individual grew from $250 to $400. For a family, it rose from $1,000 to $1,500.
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3 Responses to “Companies reveal plans for capping health costs”

  1. Wendy Weinbaum Says:

    Until all group, employer-paid health insurance is outlawed….criminalized….there will be inflation in the heathcare arena. Only when people pay their own bills there, as they do for ordinary car maintenance, will they watch costs, and ask doctors the PRICES of procedures, tests, etc. beforehand. When was the last time you shopped for a lower-priced doctor, or a cheaper diagnostic test provider, as you do when buying cars, groceries, clothing, etc?

  2. Roger C Says:

    Fortunately, our employers have the ability to negotiate better pricing for employees with the providers. Out-of-network providers are going to cost our employees more. I find service providers unwilling to negotiate substantive breaks in costs if going it on my own.

  3. GMG Says:

    We implemented a high deductible PPO plan with a Health Reimbursement Account of $750/year that rolls over the unused portion to the next year — and our costs went down. People very definitely think twice before running to the hospital emergency for a flu. It does work well to get people to take more responsibility for their decisions.

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