Prices for everything are increasing due to rising energy costs, but health insurance costs have been rising steadily for a number of years. Professionals who work with insurance and benefits see this increase bringing change that’s not necessarily related to the economy’s current woes.
Ken Ray with Stewart, Sneed, Hewes Insurance sees trends to higher deductibles, limited medical plans and more out-of-pocket expense to employees due to rising policy premiums.
“Employers are slowly passing along more costs to employees, but I haven’t noticed them dropping coverage altogether,” he said. “They’re being innovative.”
In the insurance business since 1973, he also sees a big uptick in limited medical plans with fewer bells and whistles that’s less expensive. There’s also a move toward catastrophic insurance, health savings accounts (HSAs) and health re-imbursement accounts (HRAs).
“HSAs and HRAs are a growing trend nationally but are slower to catch on in Mississippi,” Ray said. “HRAs have a higher deductible and have money in accounts for employees to use for day-to-day doctor visits before they reach major medical.”
He applauds the Mississippi Risk Pool for individual coverage as a model for the country. “It’s something we should be proud of because we were one of the pioneers in health risk pool insurance,” he said. “In many cases it’s cheaper than group plans if a person has no health problems.”
Connie Otts says she’s dealt with employee benefits for years and it’s a tender subject with her. “It’s not the slowing economy. That’s really not what drives healthcare as much as individual life style — something that can be controlled,” she said. “We stress wellness and prevention programs that include yearly checkups and age appropriate tests.”
She’s enthusiastically promoting wellness programs at 4-County Electric Power Association in Columbus where she’s the human resource and benefits administrator. The voluntary programs are open to employees’ families, too.
“We have a pedometer program going on now, and 80 employees and 20 spouses out of 160 employees are participating,” she said.
Otts doesn’t see employees dropping coverage but does see more of a move to basic and major coverage. “I see some dropping some of the fringe policies such as vision and dental as needs and utilization change,” she said. “Even a higher deductible for major medical is better than no coverage at all. The economic crunch is on, but the employees I deal with realize they need coverage.”
Among Cadence Bank’s 540 employees, Amy West, human resource manager, does not see employees dropping coverage, but she, too, sees a trending to higher deductibles and smaller premiums.
“The lower premiums help ease monthly expenses on the budget,” she said. “Employees are not eligible to drop any coverage until our enrollment time in January. That’s when we may have some dropping supplemental plans. I do see more people evaluating their plans.”
She thinks it may be better for some people to put money into medical flexible spending or dependent care with the benefit of having the funds deducted before taxes.
Scott Moak with Ross & Yerger Insurance Company deals with large group coverage. “Business owners are having to decide how they will deal with insurance,” he said. “It’s common to dilute benefits, increase co-pays and shift costs to employees. None of these are desirable.”
He, too, sees a big trend toward education to help employees make better healthcare decisions. “Without that, we can’t make changes. Health and wellness are a huge issue,” he said. “It’s evident what providers are trying to do. The business owner can believe it and embrace it, but employees have to buy into it.”
Driving down unnecessary costs such as using generic drugs and not going to the emergency room for a non-emergency are part of the effort to contain the cost of coverage.
“An annual premium is a reaction to what the last 12 months have looked like,” Moak said. “Your past history and what the future risks look like are what underwriters see. The slowing economy and rising healthcare costs make business owners wonder what to do.”
Contact MBJ contributing writer Lynn Lofton at firstname.lastname@example.org.