Workers paying more for health insurance

By Julie Appleby
USA Today

Workers are paying more this year toward their healthcare costs as employers hit them with significant increases across the board, from premiums and deductibles to doctor visit co-payments.

The move reflects employers' increasing unwillingness to shoulder the full burden of the rapidly rising cost of health coverage.

On average, single workers paid 27 percent more toward their insurance premiums, and families paid 16 percent more, a survey of 3,262 companies by the nonprofit Kaiser Family Foundation found.

A strong economy and tight labor market had kept employers from passing along increasing healthcare costs to workers, but that began to change last spring, the foundation says.

Marsha Serlin, chief executive of United Scrap Metal in Chicago, resisted charging employees for health insurance, but had to change when rates for one of her plans rose 22 percent this year, hitting $950 a month for family coverage.

Employees choosing the more expensive plan pay the difference between it and a lower-cost HMO. "Employees hate it when you take something away," she says, "but how can you prevent it the way healthcare is going?"

Premiums have risen rapidly in the past several years, the return of an inflationary cycle that managed care slowed temporarily in the mid-1990s. Factors fueling the increase include easing of strict managed-care cost-control rules, more hospital admissions, higher charges for hospital care and increased use of prescription drugs.

The survey also found:

• Employers pay an average of $3,060 annually to insure a single worker and $7,954 for family coverage. Single workers pay an average of $454 a year toward those premiums; families pay $2,084.
• Annual deductibles rose an average of 37 percent to $276.
• 78 percent of employers expect to increase their workers' share of costs again next year.

A few companies have held the line on costs. Seats Inc. in Reedsburg, Wis., ties the amount workers' pay toward health insurance to 25 percent of the previous year's spending, says Jerry Ward, vice president of operations.

The manufacturing company talks with employees about using urgent-care centers instead of emergency rooms for minor problems and generic drugs instead of brand-name products.

"We've had lots of people who asked what we are doing that's so different," Ward says. "It almost seems too simple to say that we share information with our employees. That seems to work."