health insurance costs for 2011 include higher premiums and co-payments

The selection is likely to be even less appealing this year than last. According to experts and industry insiders, recent trends suggest rates will continue to rise and employers will continue to shift more of the cost of health insurance onto workers – asking them to shoulder a larger share of premiums, for instance, or increasing out-of-pocket costs such as deductibles and co-pays.Easy To Insure ME has the answers

This past year, overall premiums for employer-sponsored coverage – meaning the amounts paid by employer and employee combined – rose a relatively modest average of 3 percent for family coverage, according to a study by the Kaiser Family Foundation and the Health Research & Educational Trust. But the share of such premiums covered by the worker increased from 27 percent to 30 percent, with the result that the amount paid by workers rose an average of 13.7 percent.

The most comprehensive statistics on plan offerings for 2011 won’t be available for months. But a September survey of employers by Mercer, a leading benefits consulting company, suggests last year’s patterns will continue.

Overall, the employers said that they expected their health-care costs to increase between 9 and 12 percent – but that they planned to use cost-saving measures to effectively bring that increase down to 6 percent. Some 57 percent said one way they would do this would be to have their employees pay a greater share of the cost of coverage.

Many employers also said they would try to lower their costs by prompting employees to improve their health: Forty-four percent said they will add health management or wellness programs. An additional 38 percent said they will add incentives for employees to participate in existing programs.

Impact of the new law

Because this is the first major open-enrollment period since key provisions of the new health-care law started taking effect, many workers will wonder how much of the plan changes they see is due to the legislation. Not much, say analysts.

The law’s most market-altering changes – including provisions that may or may not control premiums – don’t kick in until 2014.

“We’re three years away from that,” said economist Paul Fronstin of the nonprofit Employee Benefits Research Institute. “For the most part, the plans don’t know what they’re going to be doing [in response]. It’s just too soon.”

There is a notable exception: On their next annual renewal date, all plans will be required to comply with certain mandates such as eliminating lifetime dollar limits on benefits and allowing parents to put adult children up to age 26 on their plan. Insurers that make certain changes to existing plans or employers that switch insurance carriers will have to offer additional benefits such as free preventive services.

It’s possible that bare-bones employer-sponsored plans – particularly small-group plans bought by businesses with only a few employees – may need to substantially increase premiums to cover the extra cost. And a number of insurers have already blamed the law for coming large rate hikes. But estimates by researchers suggest that on average premium increases for employer-based plans due to the new requirements will be less than 2 percent.

“And we’re talking less than 1 percent in many cases,” said Sara Collins, head of the insurance program at the Commonwealth Fund, a health-care research group.

Watts was less sanguine, noting that the small businesses surveyed by Mercer expected the new law’s requirements to add 3 percent to their costs. “As someone who works with employers, I can say it’s hard to get even a 1 percent increase out of your plan costs” through cost-saving measures, she said.

At other companies, particularly mid-size and smaller ones, the workers’ health status may be the determining factor. “For instance, if someone got sick in your group, especially with a disease that [your insurer] thinks is going to continue, they will take that into account when they set your premiums, and you are going to take a whack for it,” said Gary Claxton, who directs the Kaiser Family Foundation’s Marketplace Policy Project.

Large companies can be affected by shifts in the makeup of their work force. “A company will look at, for instance, are they going to be hiring or downsizing?” said Claxton. “Do they have a bunch of early retirees who are going to move from one plan to another?”

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