Employers see bigger increase in the cost of providing health care - Houston Business Journal:

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percent jump in the cost of providing health insurance for employeesein 2009, signaling the end to a slower pace of cost increases in recent years. That 7.1 percentr figure compares to a 4.6 percen t increase in the amount of money that locak employers paid toward health insurance for employeewin 2008, 5.6 percenft in 2007, 6.4 percent in 2006 and 12.2 percen t in 2005. Costs increased a whoppinh 17.8 percent in 2002. In 2009, Houstonn employers will pay an averageof $9,050 to coverr health care for each enrolled The findings, released this week, are the resultg of the 14th annual Employee Health Care Costs survey conducted by Houston-based in partnershi with the .
Considering that the countrh is going througha recession, the fact that this year’s increase was higher than those experienced over the last several yearsd is not a surprise to EBS Principal Brett Haugh. “You tend to see costs jump back up as an economifdownturn occurs,” he says. “As companies experiencde economic difficulties, people are nervous on a daily basis about reductionsin force, so they go ahead and push forware their utilization of health care.” And Haugh predicts that health care costse are likely to continue to increase. “2008 was kind of bottok of thevalley ... now they’re beginning to escalate back he says.
Rick Huntington, director of the Houstob Business Groupon Health, says the increas indicates that “employers have done very little to add to management programs in regards to health “They didn’t do enough to head off the impacgt of the cycle, and we certainly expecft it to be a lot highe r next year,” Huntington says. In 2009, employerds subsidized 79 percent of overall medical plan up 2 percent fromlast year’s survey. Haugh says historically, the city’s employers often pick up more healtn care costs than other markets acrossthe nation, where employers on averager subsidize 70 percent to 75 percentf of costs.
Houston employerse say the changes that were madein employer-driven healthj care plans this year were tied to the bottom line of costs. “Costs are not going unfortunately, and as health care cost in generalgo up, we have to pass some of those costs on to employees as well,” says Elainwe Britt, director of benefits for . But Britt says Rice make s an effort to stay competitive with otherelocal businesses. “Depending on where you’rew coming from, we can look great or not as competitive,” she says. “Thise survey gives us a neutrall view acrossthe board.
” The survey reflectedr the responses of 143 Houston employers, including some large companies in the energy industry. The resultd found that only a small number of surveyh participants are considering a reduction in benefit as a way tocontrol costs. Instead, 57 percenf of companies said they are considering requirinb employees to contribute more to cover the cost of theifhealth care. That percentage of employers contemplatin g such a move is smaller than the 74 percent reportedin 2008. In term of insurance plans, preferred provider organizations, or remained by far the most popular.
Of 284 plansw offered, 203 were Consumer-driven health plans, or continue to grow at a very slow Last year, their costs only increased eight-tentha of 1 percent. The prevalence of companies offering a CDHP plan rose to 35 in 2009 from 32 in or about9 percent. Huntington blames this on the lack of transparency offered by providers andhealth “We have not held them accountable for increasingg efficiencies,” he says. “For example, consumers have a lack of transparencyy on what it costs to deliver a baby at one hospitalo comparedto another.
Providers and health planes need to be more open with costs and dataon