In a welcome development for employees of some companies ”“ and a worrisome one perhaps for some insurance carriers and policymakers ”“ businesses increasingly are picking up some of the cost of pricy deductibles they are accepting in their health plans in exchange for lower monthly premiums.
Intended to keep health costs in check by discouraging physician and hospital visits for minor ailments, under some family plans deductibles have reached levels to gouge pocketbooks, despite features like exemptions and annual caps intended to minimize that scenario.
And as health insurance premiums continue to rocket upward in Connecticut and elsewhere ”“ employers are facing a backlash from some workers fed up with the amount they are shelling out for coverage.
“All it did was stem (from) the tide of increases,” said David Lewis, CEO of OperationsInc, a human resources consultancy in Stamford. “Now the brokers are going out there and getting laughed out of the room ”¦ You have family (plan) numbers that are obscene, off the charts. It”™s commonplace now for that employer ”¦ to go ahead and cover half, three-quarters of that (deductible).
“It”™s a very weird, unexpected twist and yet the market continues to migrate each year toward high-deductible plans,” he added.
If an emerging phenomenon, such tactics are nothing new ”“ such a gap-style subsidy approach goes back to at least the mid-1980s, according to the publication Business Insurance, which reported last week that some health care insurers are trying to crack down on employers that self-fund a large part of the cost-sharing burden on employees enrolled in high-deductible health plans. At least three carriers doing business in Connecticut and New York reportedly issued letters to plan administrators addressing the practice: Hartford-based Aetna Inc., Minnesota-based UnitedHealth Group and the New York affiliate of Anthem, a subsidiary of Indianapolis-based Wellpoint.
In a statement to the publication, Aetna said it needed to understand its clients”™ funding arrangements with their employees in order to appropriately price its premiums and that the plans are intended to motivate employees to become “more engaged in their own health care.”
In a February report, Moody”™s Investor Service cited high deductibles and co-pays as playing the biggest role in limiting growth in health services, along with high unemployment.
For its part, the Connecticut General Assembly is also wrestling with the implications of high deductibles as it crafts a near-universal health plan dubbed SustiNet ”“ a plan that could eventually force a showdown with Gov. Dannel P. Malloy who has questioned the high costs it could place on Connecticut as he attempts to put the state budget back in the black.
“Some people pay so much out of pocket ”“ they may pay tens of thousands of dollars out of pocket before they even get a dollar”™s worth of health care (insurance),” said Meriden Rep. Chris Donovan, speaker of the Connecticut House of Representatives, testifying in Hartford last month. “It”™s health care ”“ on paper.”
Ganimedes Barrera, who owns an accountancy business in Stamford, backed that sentiment.
“I cannot afford buying health insurance for my employees (and) I feel very uncomfortable when they talk about this issue in my office,” Barrera said. “It affects me from the business standpoint and especially from the human standpoint ”¦ My wife and I lost our health insurance because insurance premiums are too expensive and as the time goes by, my premiums increased more and more because of our age. Even if we could, deductibles are ridiculous to the point that to take advantage of this coverage, we will need to be suffering a terminal illness.”
