Rising costs will drive health care change, with or without Congress

As health care costs continue to rise, more and more employers are looking at ways to either cut benefits or increase the amount employees pay towards those benefits. Without some significant action from Congress this year to contain health care costs, you can certainly expect to see more employers reduce their share of the health care cost pie.

That's because health insurance premiums have increased 131 percent since 1999, costing a company an average of $13,375 per employee family in 2009, according to a new study released by the Kaiser Family Foundation. Inflation has grown only 28 percent during that time and wages have grown 38 percent.
The Kaiser Family Foundation surveyed employers' reactions to rising health insurance costs and they found that in the next year:

* 42 percent of employers are very or somewhat likely to increase the amount workers contribute to premiums.

* 36 percent are very or somewhat likely to increase deductible amounts.

* 39 percent are very or somewhat likely to increase office visit cost-sharing.

* 37 percent are very or somewhat likely to increase prescription drug co-pays.

Only 46 percent of workers who worked for a company with between three and nine workers had access to health benefits, while 98 percent of workers who worked with a company that had 200 or more workers had access to health benefits. The larger the employer, the greater chance that health benefits were offered.

This survey does not collect information from businesses that closed during the year, so it does not estimate the number of workers who lost coverage due to their company's downsizing or closing.

Drew Altman, president and CEO of the Kaiser Family Foundation, wrote in comments posted on the foundation's website: "If we assume that premium increases over the next ten years will average what they did over the last five (about 6.1 percent), the average premium for a family policy in 2019 will be $24,180. That's a big number. On the other hand, if we assume increases revert to the average of the last ten years -- an average annual increase of about 8.7 percent and a very plausible scenario -- premiums in 2019 will average a whopping $30,803, a very scary number."

A company can hire an employee today at about minimum wage for about $15,000. Health care benefits could become more costly than salaries for some workers. We know minimum wage won't rise anywhere near as quickly as health care costs.

Antonio Perez, chief executive of Eastman Kodak and a leader of the Business Roundtable, told The Washington Post that the status quo is simply not an option. He said these costs are unsustainable and "would put millions of workers at risk."

Clearly the status quo won't work and Congress must come up with a reasonable alternative for getting control over health care costs. While scare tactics are being used to kill any effort to put the breaks on health care costs, it's time for these type of tactics to stop and for a rational discussion of what can be done to begin in Congress.

Lita Epstein has written more than 25 books, including The Complete Idiot's Guide to Social Security and Medicare.
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