Survey says employers shift burden to employees

Businesses in southeastern Wisconsin increasingly are shifting the burden of rising health care insurance costs onto their employees, according to an ongoing survey.
In the survey, 71 percent of employers are increasing the deductibles and co-pays for their employees in their health insurance plans, 45 percent are increasing the out-of-pocket maximum payments for employees and 38 percent are increasing their employees’ shares of insurance premiums.
The ongoing survey is being conducted by The Greater Milwaukee Annual Report on Health Care. Employers in the region can participate by viewing the survey at www.hctrends.com.
The Greater Milwaukee Annual Report on Health Care was recently published and includes extensive research about the industry in the region.
The survey indicated that only 8 percent of employers are establishing health savings accounts (HSAs) for employees. HSAs were authorized by the Bush administration in the past year as a method of helping employees save money to pay for their health insurance costs, although critics contend the plans simply make it easier for employers to shift health care costs to employees.
Other significant findings in the survey include:
* 62 percent of employers offer no wellness, health risk assessment or disease management programs for employees.
* 68 percent of employers say their were facing health care insurance cost increases of 10 to 24 percent this year before they implemented changes in their plans to shift more costs to employees.
* 53 percent of employers say their health care insurance cost increases were 10 to 24 percent after they implemented changes to shift more costs to employees.
* 16 percent of employers are still paying for all of their employee health insurance costs.
* 58 percent of employers say their plans require employee physician visit co-pays of $20 to $30.
"Smaller businesses continue to be the hardest hit. In its first survey of Milwaukee-area businesses, (the report) found that, while almost half of all businesses were able to keep their 2003 cost increases below 10 percent after making changes, almost two thirds of smaller businesses (5-199 employees) experienced increases of 10 to 24 percent," the report stated.
According to the report, local health maintenance organizations (HMOs) continued to profit. United Healthcare’s profit per enrollee more than tripled in 2003 to $179.04 from $51.77. Compcare’s profit per enrollee increased to $135.03 in 2003 from only $6.91 in 2002, and Humana’s profit per enrollee in the region jumped to $52.08 in 2003 from a loss of $76.49 in 2002.
The report concluded the Milwaukee area’s average employer health care cost per employee in 2002 was $6,389, far greater than the average costs measured in seven other metropolitan markets studied: St. Louis, $5,727; Cleveland, $5,725; Minneapolis, $5,628; Seattle, $5,314; Denver, $4,894; Portland, $4,773; and San Francisco, $4,627.
The report cited three main factors for the Milwaukee area having the highest costs among the eight markets surveyed: (1) The region has a significantly greater proportion of manufacturing jobs (21 percent) than the other cities have; the region has the highest percentage of businesses of five to 99 employees (48 percent), and those smaller companies can’t negotiate for lower costs like larger corporations can; and the region has the lowest percentage of "very small businesses" of less than five employees (48 percent), and those companies tend not to offer health insurance.
The ongoing survey is sponsored by The Benefit Services Group Inc, Milliman USA, Aurora Health Care and Wisconsin Physician Services and the Metropolitan Milwaukee Association of Commerce (MMAC).
The Greater Milwaukee Annual Report on Health Care is published by Metro Business Publications Inc. in Milwaukee. Dave Jensen served as the editorial director of the research. To obtain the full report or additional information, visit www.hctrends.com or call (414) 454-0224.
August 6, 2004, Small Business Times, Milwaukee, WI