In the News-2014 Health Insurance Costs Rising More
Open-enrollment packets have reminded local employees in recent weeks that the U.S. health-care system is the most-expensive in the world.
Employee-benefits consultant Aon Hewitt is forecasting a 6.9 percent increase in overall annual premium costs in the Columbus area next year, with the average total premium cost per local employee reaching $10,777. That includes both the employer’s and employee’s share.
It’s the largest local increase in seven years, up from the 3.9 percent increase this year and 4.9 percent increase last year, according to the annual survey.
Nationwide, employees’ share of health-care costs — including their out-of-pocket costs — is expected to be $4,969 in 2014, up nearly 150 percent from a decade earlier.
Gov. John Kasich’s administration is leading a public- and private-sector partnership that will try to make health-care costs more affordable, both for the tax-funded Medicaid program and the private insurance market. Within five years, the goal is to have as much as 90 percent of Ohio’s population covered by insurance that emphasizes value over volume, according to an Oct. 18 presentation to the governor’s Advisory Council on Health Care Payment Innovation.
“We expect savings on a larger scale than anything we’ve seen so far,” said Greg Moody, director of the Governor’s Office of Health Transformation. “Instead of medical inflation going up 6 or 7 p ercent every year, why wouldn’t we expect it to go up 3 or 4 percent a year?”
State officials, with a $3 million federal grant authorized by the Affordable Care Act, are working with some of Ohio’s largest health insurers to base payments on value. The insurers include Aetna, Anthem Blue Cross and Blue Shield in Ohio, CareSource, Medical Mutual of Ohio and UnitedHealthcare.
Cost-savings projections will be included in the state’s application for millions in additional federal aid, which would be used to implement the system next year. Health-care providers would be paid based on how effectively they treat their patients — not the number of procedures they perform — in an effort to improve an individual’s overall health.
“We have to shift our focus to things that give us an opportunity to hold down costs,” said Moody, who often notes that Ohio spends more per person on health care than all but 17 states, yet 36 states have healthier workforces.
The advisory council will first focus on using primary-care doctors to coordinate all the health care their patients receive and designing new ways to pay for five high-cost “episodes,” including joint replacement and certain treatments of asthma and chronic obstructive pulmonary disease.
In primary care, bonus payments would be given to doctors who: oversee all of their patients’ care; use electronic health records for all patients; provide 24-hour, seven-days-a-week access to their practice; adopt disease-management protocols; and track patients when they go into a hospital.
Such practices, Moody said, are known to lower overall costs and improve health.
Still, people do get sick and sometimes require hospitalization. To save money on that end, the state’s plan would base payments on various ailments’ average cost — which can now vary widely — creating competition among health-care providers.
Nationwide, Aon Hewitt is forecasting, the cost of health benefits per employee will rise
6.7 percent. Another consultant, Mercer, forecasts a 4.8 percent increase.
Steven Keller, Aon Hewitt vice president and practice leader in central Ohio, said the lower rate of increase in health-care premiums in recent years is partly a reflection of lower health-care usage during the recession.
He said 2014 rates have been driven up somewhat by new fees, including a $63 fee per covered person included in the Affordable Care Act. The fee is meant to help insurance companies pay for high-cost patients who buy insurance policies through government-run marketplaces.
Mercer officials say more cost-conscious employers continue to gravitate toward: managing worker health through wellness programs; defining how much they’ll contribute toward their workers’ health benefits and having workers buy coverage through privately run health-insurance exchanges; and limiting the eligibility of their workers’ spouses to be on their health plan, or charging them extra.
“They’re very concerned about where their costs are today, and they’re very concerned about where their costs are going to be five years from now,” said Jason Beaver, a Columbus-based principal in Mercer’s health and benefits business.
Employers are also mindful of the eventual impact of the so-called “Cadillac tax,” which takes effect in 2018.
That’s an Affordable Care Act excise tax on high-cost health plans that employers offer — plans with total costs that exceed $10,200 for individual coverage and $27,500 for family coverage.
About 17 percent of organizations have begun to redesign their health plans to avoid the tax, according to a survey by the International Foundation of Employee Benefit Plans.
This news is brought to you courtesy of Dr. Mark Bishara & The Paragon Med Spa
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