Analysts are predicting record increases in insurance rates this year, and PEOs and employers all over the country are bracing for the hit. Apparently, the insurance industry has tried all of the gimmicks—the HMOs, the Preferred Provider Organizations—and we’ve gotten to the point where it’s just not possible to tighten the belt any more.
Employers are scrambling for alternatives other than passing additional costs to employees. One option is to increase the workers’ annual out-of-pocket maximum. Other businesses are offering medical savings accounts and new managed care programs that give patients financial incentives for choosing lower-cost doctors and hospitals. Still others are turning to Professional Employer Organizations.
Health care specialists concede that restricting a patient’s choice about his or her own health care is not the solution. “What we want to do is change the game so physicians and consumers can make more informed choices about the cost and quality of care,” says Scott Forslund, spokesman for Premera Blue Cross, a Washington state insurance carrier.
One option for lowering costs over the long run is to embrace the idea of prevention. Analysts expect to see more Weight Watchers programs, more on-site smoking cessation classes, and more mobile clinics offering everything from flu shots to mammograms. PEOs are making plans of their own to assist your company in its efforts to keep insurance premiums manageable.
(See, Appleby, Julie. “Health Insurance Prices to Soar.” USA Today. )
Annual health care costs, national average
- 1997: $3,451
- 1998: $3,578
- 1999: $3,858
- 2000: $4,222
- 2001: $4,707
- 2002: $5,326
- 2003: $5,878
(Source: Hewitt Associates)
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