When you examine your health plan options during open enrollment season this fall, you may get sticker shock from the increases in both the premiums and the cost-sharing for services. Even benefits that are increasing under the health-care overhaul may come with financial strings attached. If you're one of the roughly half of workers with a choice of more than one health plan, or if you're just trying to gauge what you may have to pay to keep your family healthy next year, here's what to look out for:
The employee's share of the average $13,770 total premium for family coverage went up 14 percent this year, to $3,997, according to the annual employer health benefits survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust and released last month. (Kaiser Health News is a program of the foundation.) In the past five years, employees' premium contributions have grown 47 percent, while overall premiums increased 27 percent.
Workers' relative share of the premium this year grew to 30 percent of the total for family coverage, up from 27 percent last year.
More than a quarter of employees now face annual deductibles of at least $1,000, according to the Kaiser/HRET study. Some plans offer a health savings account, or HSA, an option that lets you sock away money tax-free to cover health-care expenses.
Katie and Ricky Harbaugh have a high-deductible plan. When their daughter Kylie was born last year, they got hit with roughly $7,000 in out-of-pocket costs, including a $5,000 deductible and 20 percent coinsurance for hospitalization. In previous years, Katie Harbaugh's company made a $4,500 contribution to her HSA to help cover the deductible. But last year, her employer eliminated the HSA along with its contribution. The Hagerstown, Md., couple is still paying off the medical bill.
"For a person like me who has a family, a high-deductible plan just doesn't work," says Katie Harbaugh. "I have two kids. Last year alone I was in the emergency room three times."
When you visit the doctor or a specialist, it's likely you'll still pay a flat co-payment of $20 or some other amount. But increasingly, health plans are adding coinsurance, meaning you will also pay a percentage of the charges. For example, 53 percent of plans now require coinsurance charges for hospital admissions, up from 42 percent two years ago, according to the PricewaterhouseCoopers Health and Well-Being Touchstone survey of 700 companies. Coinsurance is also on the rise for prescription drugs and emergency room visits, according to the survey.
Typically, coinsurance isn't charged after you've reached your plan's out-of-pocket maximum, says Mike Thompson, a principal in PricewaterhouseCoopers's human resources practice. But that out-of-pocket limit may still be more than you can afford, he adds. "As employees make their choices, it's important to say, 'If the worst happens, how much would I have to pay out-of-pocket?'"
Extra for dependents
The health-care overhaul gave parents the option of keeping their adult children under the age of 26 on their policies, but there's likely to be a price associated with that, say benefits consultants. Increasingly, plans are charging for every dependent on a plan rather than including an unlimited number in a single family premium.
Workers may also increasingly see another strategy to limit costs: surcharges, typically ranging from $200 to $500, for spouses who could get insurance through their own jobs. "If you have coverage available somewhere else, they want you off their books," says Sara Taylor, health and welfare solutions leader at Aon Hewitt.
Emphasis on wellness
To help sidestep the rising costs, you may be able to make some plan changes work to your financial advantage next year and get better care at the same time.
Most employers already have wellness programs of some sort. They may offer smoking cessation or weight management classes, for example, or discounts on gym memberships. Next year, employers expect to beef up wellness programs, hoping to save money by keeping employees healthier, according to a survey released in September by human resources consultants Mercer.
Increasingly, employers are linking participation in wellness programs with employee health insurance costs. Employers may give workers a break on premiums or deductibles, for example, if they meet certain biometric targets for healthy blood sugar, blood pressure and cholesterol levels, says Tracy Watts, a partner at Mercer.
As companies try to get a handle on chronic disease costs, they're also dangling the possibility of access to better, cheaper insurance for employees who take certain steps. For example, workers who fill out a health-risk assessment might get slightly lower premiums in the company's core plan. If the questionnaire identifies them as having a chronic condition that needs treatment, and if they participate in a disease management program and work with a health coach to keep their diabetes in check, for example, they might "graduate" into a plan with better benefits and lower cost-sharing.
Some may dislike the Big Brother approach, but companies aren't apologizing."The problem [with voluntary programs] is that people don't participate," says Watts. "So they're trying different strategies."