Health Care Costs Rising, And Reform Is Cited

Nov. 02--The new federal health reform law, a whipping boy for many politicians running for office, is increasing employees' costs minimally while providing new benefits, according to interviews with Lehigh Valley employers and benefits consultants.

As companies offer their workers the option to adjust their health benefit packages this fall, employees at many companies are finding they will have new benefits such as extended coverage for young adults and coverage for children with pre-existing conditions -- at relatively little additional cost.

"From an employee's perspective, there's not a whole lot that's bad here for them," said Roger Howell , president of regional benefits consulting firm Howell Inc., which provides benefits consultation services for more than 1,200 large and small businesses.

Still, health care costs are continuing to rise and administrative tasks mandated by the federal law are multiplying, he said. In many cases, Howell added, the regulations needed to make the law work are not yet written. "I think the biggest issue with health reform is the administrative issue," he said.

At a recent forum sponsored by the Greater Lehigh Valley Chamber of Commerce, health care experts said the same forces that have been driving health care inflation in past years continue to push costs upward today. Dr. Brian Nester , a senior vice president at Lehigh Valley Health Network, said an aging population is the primary reason for ever-rising costs.

"That's where a lot of the spending goes," he said. "If a service exists," Nester said, "it gets used."

At the same forum, St. Luke's Hospital and Health Network's President and CEO Richard A. Anderson said the public has come to expect the best for their health care. "If you don't have the latest and the greatest and the best and the nicest and the cleanest and on and on and on, you will not have market share," he said.

Anderson lamented lawmakers' decision not to address patients' unlimited right to sue health care providers. To protect themselves, doctors practice "defensive medicine," which Anderson estimated is 30 percent of health care costs at the hospital level.

A survey of some of the Lehigh Valley's largest employers showed that some companies are passing along rising costs to their employees. At Air Products and Chemicals, spokeswoman Beth Mentesana said employees are paying more for their health coverage, but the company-employee share is the same.

Lehigh Valley Health Network, the region's largest employer, pays employees' health care premiums in full, but workers have to buy coverage for family members. That cost is going up less than 5 percent, said spokesman Brian Downs . Those costs are rising because more claims are anticipated as more people are covered, he said.

Number-two employer St. Luke's also covers employees' premiums in full and for the first time is instituting charges for dependent coverage, said Bob Zimmel , senior vice president for human resources. The new fees for dependents may have been imposed even without the federal reform law, he said.

PPL Corp. has about a dozen different health plans for various employee groups, said spokesman Paul Wirth . The health care reform law is responsible for increased costs for some employees, he said, but "the lion's share for the increasing cost to employees is the national trend of rising health care costs."

A Walmart representative declined to address the role of the reform law, but said the company was offering five health plans to employees. Some of the plans will feature a new Health Reimbursement Account, in which the company reimburses employees' health care costs in return for a tax break, said Kory Lundberg . The company employed about 1,765 in the region as of 2009.

While companies have been making significant efforts to comply with the new law, Howell said, they could find the health care environment changed again if Republicans gain a majority in the House of Representatives. Republican leadership could decide not to appropriate funding for the law, he said. "If that happens, then this could end up being a sort of zombie act, where you have an act, but it's not alive," Howell said.

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