Health-care Cost Issues Being Ignored

<b></b>Copyright 2008 Philadelphia Newspapers, LLCAll Rights Reserved The Philadelphia Inquirer <br> <br> <b></b><span id="x_hitDiv1"><b>September</b> 25, 2008 Thursday CITY-D Edition <br> <br> <b>SECTION: </b>BUSINESS; P-com Biz; Pg. C01 <br> <br> <b>LENGTH: </b>562 words <br> <br> <br> <b>HEADLINE: </b>Health-care cost issues being ignored<br> <br> <b>BYLINE: </b>By Jane M. Von Bergen; Inquirer Staff Writer <br> <br> <p></p> Either way, it's a problem. <p></p> If insurance costs skyrocket, it's a problem - for obvious reasons. And if, as now, the annual rise in insurance costs has moderated to a relatively modest 5 percent, it's still a problem. <p></p> "We have not dealt with the fundamental underlying issues" driving costs, said Drew Altman, president of the Henry J. Kaiser Family Foundation in California, which yesterday released its annual survey of employer health benefits. <p></p> "The rate of increase is not an outsized one like we have seen in the past, but the long-term picture is unchanged," he said. "Premiums have risen 31/2 times as much as wages." <p></p> Two organizations that survey employers about health insurance benefits and a health insurance trade group agreed yesterday that more needed to be done to increase affordability and reduce costs. <p></p> But, with Washington's current focus on the financial bailout, Altman said, it is unlikely that time or money will be directed toward solving the underlying causes of what has long been an important economic, business, and political issue: rising health-care costs with declining coverage. <p></p> "The bailout makes it so much tougher," he said. <p></p> Kaiser's 10-year-old annual survey, conducted with the Health Research Educational Trust, of Chicago, measures trends in employer-provided health insurance. <p></p> The other survey, by Connecticut consulting firm Towers Perrin, of 321 Fortune 100 companies, showed an increase of 6 percent in the per-employee cost of the employer health benefit. <p></p> While both surveys found that growth in health-care costs had slowed, the rates still were higher than inflation. And as health-care costs continue rising, lower-wage workers and those who have retired early will face affordability challenges, the Kaiser survey noted. <p></p> America's Health Insurance Plans, a trade group for insurers, said the slowing growth in premiums "shows we are moving in the right direction, but much more needs to be done." <p></p> The Kaiser study shows that employers, while increasingly interested in disease management and wellness programs, keep asking employees to pick up an ever-higher proportion of the insurance tab. <p></p> Employees now pay larger shares of the premium, higher deductibles and bigger co-pays. <p></p> Among employers, high-deductible health insurance coverage - also known as consumer-driven policies - has become increasingly popular because overall costs are lower, even including what employers kick in to offset deductibles, the survey showed. <p></p> Now, 35 percent of all workers in small companies who have health insurance face deductibles of more than $1,000, the survey shows. In larger companies, 9 percent of employees have $1,000 deductibles. <p></p> This year's lull is likely to be temporary, said Jon Gabel, senior fellow of the National Opinion Research Center, which helped Kaiser survey 1,927 businesses from January to May. <p></p> Part of the lull is a matter of timing, he said. Companies tend to make coverage decisions in the summer and fall for the coming year. During late 2007, the economy, while faltering, was still in reasonably good shape, allowing companies to feel more generous. <p></p> Also, insurance companies are stabilizing prices to compete for market share, said Gary Claxton, a Kaiser vice president. They will not be able to keep that up, he added. <p></p> Contact staff writer Jane M. Von Bergen at 215-854-2769 or <a href="mailto:[email protected]"> [email protected]</a>. <p></p> <br> <br> <b>GRAPHIC: </b>Photograph by: Feed Loader <br> <br> <b>LOAD-DATE: </b>September 25, 2008 <br> <br> <div> <div class="x_nshr"> <center></center> <center><a href="http://www.lexis-nexis.com/lncc/about/copyrt.html" target="_new" class="x_pagelinks">Copyright © 2008 LexisNexis, a division of Reed Elsevier Inc. All rights reserved. </a><br> <a href="http://www.lexis-nexis.com/terms/general" target="_new" class="x_pagelinks">Terms and Conditions</a> <a href="http://www.lexis-nexis.com/terms/privacy" target="_new" class="x_pagelinks"> Privacy Policy</a> <br> </center> </div> </div> </span>