U.S. workers already getting socked with higher gas and food prices in an all-around tough economy aren’t likely to get a break from their health-care costs, which are expected to rise next year in the form of out-of-paycheck and out-of-pocket expenses.
In 2009, the combined average premium and out-of-pocket costs for health-care coverage for an individual worker are projected to climb nearly 9 percent, to $3,826 a year, according to an annual study by Lincolnshire-based Hewitt Associates in preparation for open-enrollment season. Companies, meanwhile, will see their health-insurance costs rise 6.4 percent, to an annual tab of $8,863 per employee.
For workers, contributions to premiums are projected to rise nearly 8 percent, to $1,946, or a bite of about $162 a month out of their paychecks. And they’ll be spending $156 in out-of-pocket costs monthly, which are rising 10.1 percent.
“People are getting hit from all over the place,” said Craig Dolezal, principal in Hewitt’s health-management practice. “Companies are hunkering down through this.”
Workers will begin seeing next year’s pain for their share of medical-care costs in the coming weeks of open-enrollment season, the annual corporate ritual that allows employees to select or change their benefit plans for the following year.
Hewitt’s projections are calculated with data from more than 300 major employers and more than 13 million health-plan participants, and they are reported as an average per individual worker. Employees with family coverage would tend to pay more and workers with single coverage would tend to pay less. And because Hewitt’s survey largely focuses on larger employers with an average of 16,000 employees, businesses with fewer workers would also tend to have higher costs than those highlighted in the survey.
Though rate increases are smaller than those workers saw in the double-digit percentage increases of two years ago and throughout the decade, their out-of-pocket costs and premium expenditures have tripled in the past 10 years.
Analysts say much of this comes from employers shifting costs to their workers in the forms of higher deductibles or co-payments on everything from drugs and doctors’ office visits to last-minute trips to the emergency room. Hewitt says more companies are increasing co-payments for emergency room visits to $250 or higher as a way to encourage a visit to an urgent-care center or even a retail-health clinic.
Take Fifth Third Bancorp, which last year doubled its emergency room co-payments for workers in its health plans to $100 from $50 and increased the urgent care co-payment to $50 a visit from $30.
“We really want to get employees to start with the family physician and even get a family physician,” said David Story, vice president of health and welfare benefits at Fifth Third, which has about 2,000 employees in the Chicago area. “You find that employees would use the urgent care as a family doctor.”
Employers are trying to offer other incentives to their workers, including giving them everything from gift cards to retailers, cash incentives and other freebies to seek preventive medical care.
At Bison Gear and Engineering Corp. in St. Charles, the company will next month offer its 280 employees a free flu shot when they had to pay $25 in the past, said Ron Bullock, chairman of the company.
Bison joins a trend that is proliferating. Chicago-based business coalition Midwest Business Group on Health said a survey this year of more than 100 companies indicated nearly one-quarter of them are providing “cash or other incentives” for their workers to obtain preventive services.
“They can be proactive about their health,” Bullock said of his employees’ use of preventive-health services.
Bullock said the company has intensified efforts to encourage wellness at its annual health fair held in October. Employees can get some blood tests as part of a health profile the company hopes will lead to more preventive care. Bison also remodeled a 700-square-foot fitness center last year.
“We have anecdotal information where people were alerted to a potential problem and they go see their doctor and they avoid having it turn into something that can be life-threatening,” Bullock said. “When you are self-insured, it’s all about the number of major cases you have each year. Our catastrophic insurance kicks in at $40,000 for an individual case.”
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bjapsen@tribune.com
