November 16, 2006 | Posted By Diane Pfadenhauer | print this article

More on Health Benefit Plans Paying Less, Costing Employees More

This week's Time Magazine has an article discussing a continuing trend for insured workers to pay more for their health benefits in terms of deductibles and premiums.

  • For the average employee, premiums and out-of-pocket expenses will reach $2,904 a year for a family, up $300 from 2006. That's the pass-along pain of the costs that employers now endure, nearly $9,000 per employee, up an estimated $518 from this year.
  • Containing those costs is a new corporate imperative. Among the tactics: bosses are skimping on raises.
  • Someone making $40,000 a year can anticipate a 4% pay increase next year. (Don't spend it all in one place.) With health-care costs expected to rise about 7%, that means at least 16% of that raise would go to higher premiums or new out-of-pocket expenses.
HSA's are often touted as tin the he magic bullet for some off these problems.  A recent article in the Wall Street Journal on HSAs (registration required), however reminds us that such plans are really only ideal for two groups - the healthy and the wealthy. 

"If you're young, healthy or wealthy, health savings accounts, or HSA's, can help to defuse a looming time bomb -- the six-figure, out-of-pocket health-care tab that experts believe most of us will face during retirement. Because the young and healthy generally don't spend much on health care today, current savings can pile up for later. The wealthy, meanwhile, can max out their savings and hope they don't need it all before they retire."


The myth of the HSA is even more absurd as we hear benefits consultants tout the benefits of having employees "empowered" to negotiate benefits costs and think twice before going to the doctor.   Some would have us believe that employees have been on the gravy train for far too long, that they go to the doctor when it's unnecessary whenever they feel like it and that they have no sense of what health care costs.  While that may be true for some, it is certainly not true for all.

Too bad we still have plans out  there that require people to go to a primary care physician, who gets to charge for doing nothing other than filling out a form.  Add to that the reality that the public can obtain very little information on what health care charges will cost as they are placed at a considerable disadvantage when dealing with health care providers.  I'll stop now.  Can you tell I'm annoyed?