How much more you’ll pay for health care in 2010
October 7, 2009 by Christian SchappelPosted in: Health care, Money, Pay and benefits, Special Report - Benefits
While Congress stumbles over healthcare reform, employers continue to be buried in double-digit cost increases. And in 2010, those increases aren’t expected to slow down.
Big increases are once again in store for employers next year, according to the latest estimates from Buck Consultants.
Figures to help you budget for next year
The forecasts on rate hikes for 2010, based on type of plan:
- Preferred Provider Organization (PPO): an 11% increase (down slightly from 11.1% a year ago).
- Point-of-Service (POS): a 10.2% hike (10.8% last year).
- High Maintenance Organization (HMO): an 11% jump (11.1% last year).
- High Deductible Consumer-Driven: a 10.4% increase (10.7% a year ago).
Prescription drugs
Don’t expect relief to come from prescription drugs, either.
When it comes to prescribed meds, patients will pay an additional 10.8% in 2010. That’s on top of this year’s 11.4% increase.
Tags: Buck Consultants, congress, healthcare reform, High Deductible Consumer Driven, High Maintenance Organization, HMO, Point of Service, POS, PPO, Preferred Provider Organization
October 8th, 2009 at 11:12 am
We’ve already gotten our 2009/10 rates for our HMO. The increase was 13.5% and we negotiated down to an 11% increase. Of course we had to raise our co-pays.
October 8th, 2009 at 11:35 am
The numbers you show here are NOTHING compared to what Capital Blue Cross did to us. They raised the cost of our PPO a whopping 60%!!!!!! I guess we will be changing insurance companies for 2010. How can we continue to provide good health insurance to our employees at this rate?
October 8th, 2009 at 12:15 pm
Not sure where these numbers are coming from. We have had a look at our 2010 rates and they are increasing anywhere from 27-46%. To add an insult, we are a preferred group because of low claims experience. We carry a high deductable plan.
October 8th, 2009 at 12:32 pm
The benefits of the so called health care bill (coverage) will not commence until 2016 but the “taxes” on everyone will begin immediately.
That is how the numbers were played so the program would look like it is saving money….it won’t happen….robbing Peter to pay Paul is a scam.
Medicare actually rejects more claims than the closest private healthcare provider (8.65%) and plenty of waste can be eliminated in medicare…so why isn’t it being done already???
All those white coated Obama supporters on the White House lawn didn’t fool anyone did it? 3 of the 4 standing with him are ardent financial supporters from the Doctors for Obama political movement….will this childlike deceptiveness ever cease!
October 8th, 2009 at 12:44 pm
We just got our medical renewal numbers in today for our 1/1/10 renewal. We are a manufacturing firm in Michigan, 85 full-time employees, currently offering a PPO, and our renewal increase was only 3% (pending the impact of the MHP, which we are told may only increase it by another percentage point). We were shocked, as our TPAs were preparing us for 12-15%, which has been the consistent increase for the past few years.
October 8th, 2009 at 1:18 pm
Wow, I would love to be shocked like you HRdetroit. We are anticipating at least 20-25% increase. Unfortunately, we are in CA.
October 8th, 2009 at 1:19 pm
HRdetroit, who is your company’s carrier?
October 8th, 2009 at 1:31 pm
Increased cost for our company health plan if we maintain same benefit design…$100-$150 per month. Rates increased by 16.5%. Our other option is to increase the employee spending at time of service for a mere 12% increase. Family plan will cost $17,112/year or the equivalent of $8.23/hour for a full time employee.
Fortunately we took our renewal to market and received a competative bid which came in at a more tolerable 2% increase. Competition would appear to be the key to keeping costs in line.
October 8th, 2009 at 1:41 pm
AG, we are with Blue Cross Blue Shield of Michigan.
October 8th, 2009 at 1:43 pm
Last year our PPO increased 13-14%. We were relieved to see 7.4% this year.
October 8th, 2009 at 1:46 pm
Our HMO increase came in at 15%. However, we switched companies and were able to lower the increase to 8% with comparable coverage. More paperwork for HR, but worth the savings.
October 8th, 2009 at 1:48 pm
HRdetroit: I’d like to know who your carrier is, too. We’re in California and our services are in outpatient mental health, so that alone sometimes gets us eliminated (particularly in workers’ comp quotes) – stigma is alive and well!
martin – this is the free market at work – we’ve had double digit or nearly double digit increases every year I have been doing this – since 1994. The letters we get use practically identical language about how the carrier strives to keep costs low, but “unfortunately, we must raise premiums this year” – unfortunately for the employer and consumer, not the carrier, I think. I agree with you that waste, wherever it occurs, needs to be eliminated.
October 8th, 2009 at 2:22 pm
We just finished ours – our claims were elevated for a few months before the renewal process began and we were bucking a general trend assumption of 10.5%, consistent with trend for 2009. Our carrier wanted 38% to start which we worked down to 17%. Subsequently we went to bid and worked the number down below 10% with two carriers. We ended up at 5.2%. Thats our first real increase since 2004.
October 8th, 2009 at 3:27 pm
Can anyone shed any light on this: I have next to no experience in medical services, always being healthy and had no need. However, a few weeks ago my daughter (43) broke her leg. She is well covered by Aetna and Aflac and as she works in claims at a Dental office, she knows her way around in the Insurance claims business. Her bill from the emergency room was over $5000 (she paid $250 of it) but the amount her insuance company had to pay was $900 (she said because of a contract Aetna has with hosptials) The rest was written off. This same pattern was indictative of all the rest of her bills. Very big write offs. What I am curious about: Why are the high amounts on the bills when they know a goodly portion will be written off? Does Medicare billing get these same advantages, or because it is the Government paying…….is that why the billing is so high? And “we” the people (Government) is paying these HIGH amounts?
October 8th, 2009 at 3:57 pm
We are with UnitedHealth Care and were told our rates were going up 30%. Our brokers convinced their underwriters to move our company into another category and were able to bring them down to about a 20% increase. Needless to say, we are going through the trouble of shopping rates. We are a small company, under 100, and therefore had to have ALL of our employees fill out Health Applications. I hope this trend doesn’t continue because bidding out rates is NO FUN!
October 8th, 2009 at 4:32 pm
Jagger, if you don’t have insurance, you are indeed expected to pay those high amounts. I don’t know how Medicare and Medicaid work, but individuals get hit by prohibitive costs. My son ended up in the ER during a two-week window between insurance plans, and the total cost to him was well over $10,000.
October 8th, 2009 at 5:07 pm
Our rates our in, BCBS of NJ. only 3.75 % and we did not have to raise anything. President decided to absorb it. Also no change to our prescription plan. I was shocked because we enjoy a very rich, low co pay, no deductable and just about everthing is covered plan. Our BCBS Dental went up 21% Go figure!!!!!
October 8th, 2009 at 5:33 pm
Jagger, Each insurance carrier has negotiated rates with doctors/hospitals. If someone is in a PPO or HMO network, the insurance plan will only pay the negotiated rate. Aetna’s negotated rate brought the bill down to $900 but CIGNA’s negotiated rate may only bring the same bill down to $1200.
Medicare may pay only $500 and then if someone has a supplement, that plan will pick up the difference.
Then there are secondary networks so a doctor or hosptial is considered out of network but there is an agreed upon discount so the bill may only be $4000 and then the plan pays based on the out of network benefits.
If you are out of network with a PPO or POS plan, the insurance will pay a lower % of the bill, charge you a higher deductible and base their payment on what they consider usual and customary for that procedure in that part of the country. So that $5000 may have a usual and customary amount of $3000. The deductible will be higher and the plan may cover only 50%-70% instead of 70%-100% for in network services. The crummy thing is the insurance company pays so little and then the doctor/hospital can balance bill you for that $2000 they said was above usual and customary for that service in that area.
If you have no insurance, they will go after you for the full $5000.
So that ER trip is going to be billed at the same rate for everyone who goes in under those circumstances but the amount the hospital receives as payment will be anywhere from $5000 down to nearly nothing. Since the hospital wants to receive the maximum amount possible from as many people as possible, I expect they draw their line in the sand as high as they realistically can. Plus the people with no insurance or who are out of network are picking up the tab for those they have to give hefty discounts to like those on Medicare.
It is very sad that those who can least afford it are the ones who have to pay the most. I always advise people who have no insurance or get hit with out of network charges to talk to the doctor/hospital and try to get the bill negotiated down. If the doctor/hospital is willing to accept $2000 from everyone else on insurance, why should someone have to pay $5000? That used to work but with the economy being crummy and people losing jobs, doctors and hospitals are less willing to negotiate.
Even for our people in network, they are being charged deductibles or their % of the co-insurance up front to receive services because doctors and hospitals don’t want the financial hit if the person cannot pay.
The system is broken. I don’t think what is being proposed will fix it. Someone will always be footing the bill and it is going to get dumped on employers and the average middle class person as usual.
October 9th, 2009 at 9:08 am
For those of you with BCBS do you have an 80/20, 70/30 plan? What do you employee premiums look like per month/week?
October 9th, 2009 at 9:30 am
We have a 100/80 plan. Not sure those costs would be a good comparison for you.
October 9th, 2009 at 9:42 am
Our BCBS plan is a $15 co-pay, no deductable, specilist $50 unless they were reffered then it is under original co-pay. ER is $100 unless admitted. If admitted, ER does not have a copay and its $50 per day in hosp up to 3 days. After that it’s cobvered 100%.
October 9th, 2009 at 9:43 am
premiums are bi-weekley $30.00 for employee only and $100.00 for family. We only have two tiers so the family rates includes spouses.
October 9th, 2009 at 10:22 am
Cindy,
How many employees in your company?
Do you use a broker?
October 9th, 2009 at 11:56 am
Wow, Cindy! No deductible??
We have a $250/$500 deductible; $20 office co-pay, $100 ER co-pay (unless admitted); just about everything else is 100%. We have a 3-tier prescription plan through BCBS as well, which is included in the renewal.
In July of this year, we increased EE contributions to 5% of the monthly premium (about $24 for singles, $54 for couples, and $65 for families). Prior to that, single EEs paid nothing for coverage, and EEs with dependents paid $25/month.
October 9th, 2009 at 12:04 pm
Cindy, I am an HR Manager in South Jersey and have Horizon BC/BS. Our rate increases have never been like yours and we have not received our 2010 renewal rate yet.
How do you have such a great plan with those copays. Are you self rated or small enough to be Community Rated?
October 12th, 2009 at 5:55 pm
We have the BCBS 80/20 plan with a $2000 deductible in New Mexico. One of our employees was injured over Labor Day weekend (not work related) and went to the ER. WIth the 80/20, they are now responsible for about $7000 of bils on top of the $2000 deductible. Apparently there is no cap on the 20% the insured is required to pay. We are a small company with 8 employees and relied on our insurance agent to find us an affordable plan so that we could provide insurance at all. Boy, was this a surprise to all of us. The worst was that initially the ER thought the employee had no insurance (as he was in shock when admitted and did not have his ins card in his wallet) and sent him a bill for $5200. Once they processed his insurance, the bill was MORE…$6400…does this make any sense? Then he got the surgeons bill…same scenario. The system is broken and will break small businesses too if something doesn’t change.
October 16th, 2009 at 4:20 pm
Wow – feeling fortunate after reading so many of the replies. This is our 5th renewal on our consumer-driven HRA plan. First three years – no increase. Last year 5%. 2010 is already signed at 0%. Didnt even take it to market. Some employees still despise the hra’s tho. They want great coverage and that only comes with pricey premiums. Think of it as your auto insurance….would you really try to turn in a visit for a tune-up or oil change or a busted headlight lens?? Insurance should be there for debt protection – not cost protection.
October 26th, 2009 at 2:32 pm
We are community rated in DC, we go through a broker and are facing increases upwards of 20%. Seems higher than normal. Should we be shopping other brokers in addition to other plans?
October 26th, 2009 at 3:14 pm
Rates are rates, but a good broker will shop your business to a lot of different carriers and negotiate with them to keep your increases as minimal as possible. There are better rates and new possibilities out there. If your broker isn’t on your side, you definitely need to shop other brokers.
October 27th, 2009 at 1:09 pm
Our rates, keeping the same plan, are 23% higher. I’m just trying to figure out if that’s out of line with other increases. It seems to be…
November 18th, 2009 at 10:30 am
I am stunned and shocked that for two years running (09 & 10) we have 0% in increases. In both years the carrier proposed increases, 3% & 3.5% respectively, which we appealed. In both cases they backed down to zero. We’re with Blue Cross in Louisiana.
We have an excellent agent. An insurance agent once told me that 90% of the people in his profession didn’t know what they were selling and of the remaining 10%, half couldn’t tell the truth if their life depended on it. If you get an agent in that remaining top 5%, they can make a big difference in your insurance future. Ours did.
November 18th, 2009 at 3:31 pm
We’re also lucky to have an agent in that top 5% — he makes my life much easier.
November 19th, 2009 at 12:50 pm
Two Things:
If you are uninsured and run up a big bill, they rarely ever go after you for the full amount. They will write off a certain amount and develop a one year no interest payment plan or longer with interest. Most of the time, people refuse to pay and it goes to collections. The rest of us pick that up in extra costs passed down to insured customers in one shape or another. They call this process “chipping”.
Jerry – The coinsurance plan you have doesn’t sound correct on the amounts. Do not get “Bills’ or Explanation of Benfits confused with the final cost. I am confused by the numbers you presented.
If the EEOB showed a bill of $6400, then a $2,000 deductible that would equal $4400 then the 20% coinsurance (I assume the were a netrok provider). That would add about $880. That would make the employee’s responsibility $2880.
It sounds like a broker issue than an insurance issue. The more risk you or your employee assumes, the cheaper the prmeium. I would assume the broker was trying to get you a “great” price and failed to explain the pitfalls or scenarios of these type of plans. These plans are generally very good for people who can manage their finances and want to put back saved premiums for the worst case scenario or for an employer that will cover the deducdtible using premiums savings saved as well.
Insurance companies offer all kinds of plans. if the premium is super cheap, you will have to assume you are taking most of the risks. The devil is in the details. I see this as the Broker’s responsibilty.