GRAND RAPIDS — Although Michigan workers pay a lot less out-of-pocket for their health insurance compared to the U.S. average, they will be shouldering more of the load in 2010.
A new survey by human resources consulting firm Mercer on employer-sponsored health plans shows companies pulling out all stops to keep 2010 health insurance costs from exploding.
In Michigan, 44 percent of employers said they are shifting more premium costs to their employees in 2010.
One reason? The 118 employers surveyed said their per-person premiums were $10,050 this year, up 5.3 percent. That’s more than $1,000 higher than the average for the Midwest and nationwide.
Across the board, about one in three companies said they will raise deductibles and copayment rates for their workers in 2010.
But half of the employers nationwide said they wouldn’t ask workers to pay more.
In Michigan, only one in three employers expected to hold the line in 2010. One factor: Michigan workers contributed less toward their 2009 insurance than their peers in the Midwest and nationwide. A lot less.
The most popular insurance option among Michigan employees — preferred provider organizations, or PPOs — cost about $79 a month for a one-person policy. That’s 35 percent lower than the national pace of $121.
Health maintenance organizations, typically the least flexible, lowest premium plans, cost Michigan workers 42 percent less in out-of-pocket expenses than the national average. A worker’s average cost statewide was $87 a month, while nationwide, the expense hit $151.
A long-standing tradition of labor unions in the state had an impact, said Greg Rhodes, Grand Rapids representative for Mercer.
“I think employees have traditionally paid less than the national norms because of the large union population,” Rhodes said. “They’ve negotiated less costly plans for their members, and that’s transferred to nonunion populations over the years.”
Employers are more likely to shift some of the burden because better data is turning up, he said.
“Surveys help employers understand what others are doing,” Rhodes said. “That’s why we’re trying to get more Michigan employers to participate in our survey.”
Taken in late summer, the Mercer survey includes responses from 2,900 employers nationwide. Some major findings:
• Big companies are more likely to implement wellness programs, discouraging smoking and encouraging healthy habits. But smaller businesses are turning to high-deductible plans, called “consumer-directed” options, to lower premium expenses.
• Nearly all Michigan employers — 94 percent — offer PPO options, while three in four companies nationwide include a PPO. The preferred-provider plans are more flexible than typical health maintenance organizations, or HMOs. In Michigan, 31 percent of companies include HMO options, nearly matching the 28 percent pace in the U.S.
• Given those options, 84 percent of Michigan employees sign up for PPO coverage; 10 percent choose HMOs, and 5 percent enroll in consumer-directed care, the option that can include high-deductible or health-flex savings plans.
Local surveys turned up similar results, said Lody Zwarensteyn, president of the Alliance for Health.
“Employees are shouldering more and more of the burden,” Zwarensteyn said. “And costs are going up. Within 10 years, the cost for an employer will probably reach about $29,000 per employee.”
Without cost-shaving tactics, health costs would have risen 9 percent in 2010. Instead, the rise is estimated at 6 percent, the Mercer results showed.
“Employers are realizing the value of communication of their plans, so people understand what the underlying costs really are, not only what the employee contribution is,” Rhodes said.
“This cost has gotten so large, if steps aren’t taken effectively, you could easily see the cost double in another five to eight years.”
Mercer is holding a briefing for its Grand Rapids clients on Tuesday to discuss health reform proposals and the insurance survey.
For Zwarensteyn, health reform is sorely needed, no matter what form it takes.
“There’s one line everybody agrees on: We cannot afford to take no action.”
http://www.mlive.com/news/grand-rapids/index.ssf/2009/11/michigan_workers_are_losing_th.html
