Insurance Option Has Workers Pay More

Los Angeles Times: Insurance Option Has Workers Pay More reports For years, they were the kinds of health insurance plans one found at small businesses or among the self-employed, plans that had huge deductibles and required workers to pay a lot of medical bills themselves — such as allergy shots, chest X-rays and the cost of a new baby. They weren't the policies most people preferred, but they were the best some people could afford, better than no insurance at all. Now, as medical costs keep climbing, those high-deductible plans are spreading to the giant corporations that have long been the backbone of traditional job-related, low-deductible health insurance. And if the trend continues, it could reshape the medical insurance landscape and sharply redistribute costs, risks and responsibilities for many of the 160 million Americans with private coverage. A number of large employers, including defense contractor Northrop Grumman Corp., the Wendy's hamburger chain, high-tech conglomerate Fujitsu and office supply retailer Staples Inc., are adding what they call consumer-directed health plans to their menus of insurance options. With the high-deductible plan, workers pay lower monthly premiums and their employers commonly help them build up a special savings account to cushion the impact of a larger annual deductible. The accounts are controlled by the employees, which has led insurers and employers to label the plans "consumer-directed"....

A very good idea.

Even if high-deductible plans offer immediate relief for many workers, and big cost savings to employers, the allure may not last. And the plans may do little or nothing to solve the basic problem of soaring health costs....

Actually they do a lot to solve the basic problem of soaring health costs. Since the healthcare consumer is paying a significant part of the bill, he is encouraged to go with generic drugs rather than brand name ones, to forgo unneeded elective surgeries, and if he must be hospitalized, to keep an eye on what is being charged, since rather than his employer or insurance company paying for everything, he pays a big chunk himself, and he is encouraged to stay healthy, to avoid costs altogether, and just let his health care savings account build up.

Employers say the new plans are not designed primarily to shift costs to workers. The ultimate goal, they say, is to cut healthcare costs by changing consumers' behavior — teaching them to be more cost-conscious about things such as generic drugs...."The key thing is the whole concept of getting the consumer engaged," said Doug Kronenberg, chief strategy officer for Lumenos. "We've got to see behavior change for us as a country to be able to address the escalating healthcare costs we've got." When patients have no "skin in the game," he said, they don't think about how to save.

Kevin Drum blogged In the LA Times today, we learn about the latest wrinkle in employer healthcare plans: extremely high deductibles paired with health savings accounts. Employers like them because they're desperate to control costs and this is the only way to do it. Employees like them for essentially the same reason: employers have been forcing bigger and bigger premiums on them, and this is a way to reduce them.

A win-win situation. The employee is encouraged to stay healthy, and if he does get sick, he is encouraged to watch the costs to make him well.

In the end, though, I think this is a mug's game: no matter how you slice things, employers will still be caught in a spiral of increasing healthcare costs, but now workers will be caught up with them. In the long run, neither side is likely to be very happy with this kluge.

I disagree. I think it is a win-win situation.

Orrin Judd blogged There needs to be a universal mandatory system that starts at birth, but once you're older your employer should be required to contribute.

Universal health care is universally bad. The only way to contain health costs is to make people wait longer for care. Why do so many people come down to the US from Canada to get treatment. Drugs are less expensive there because the government negotiates lower rates, but the waiting time for treatment is very very long