Out-of-pocket health care costs expected to rise

By Kathy Adams

Workers throughout Hampton Roads and nationwide may see another rise in out-of-pocket health care expenses next year.

According to a preliminary report released Thursday by the Mercer consulting firm, the price tag for health benefits is likely to grow by 5.7 percent in 2009, matching the rise that had been projected for this year. The increases would be the lowest in a decade, but with costs steadily rising each year, 59 percent of companies are opting to pass the costs on to their workers by raising deductibles, co-payments and other out-of-pocket expenses next year. That's according to Mercer's survey of 1,317 employers.

In Hampton Roads, some major employers say they are working to avoid raising employees' health expenses. Sentara Healthcare, for example, hasn't raised employee co-pays or deductibles during the past few years and has no plans to do so next year, said Jenny Jones, director of benefits and compensation for the health system. Instead, Sentara has instituted employee wellness programs to save money by reducing medical claims and employee absenteeism, she said.

Sentara launched one such program, Mission: Health, this year for its roughly 15,000 local workers who are eligible to receive benefits. The program matches employees who have health risk factors, such as tobacco use or cholesterol problems, with health coaches. Working with a coach to develop a health plan and following it can earn an employee roughly $440 a year in a health savings account, Jones said.

Sentara's Optima Health coverage, which insures 364,000 people statewide, is trying to "mitigate premium increases" with disease-management and wellness programs, said Sentara spokesman Dale Guading.

"Healthier people don't go to the doctor as much," he said. "Their health care costs are held in check, and the more you can accomplish that, the less upward pressure there is on expenses and premiums."

Exact figures on Optima changes were unavailable Thursday.

BAE Systems, which employs about 1,200 people repairing ships in Norfolk, has avoided co-pay increases in recent years, said spokeswoman Stephanie Moncada. The company has absorbed increased costs and saved money by educating its employees on how to be better health care consumers, such as by using generic prescription drugs instead of name brands, she said.

"BAE Systems doesn't automatically pass those increased costs on to its employees. We don't have that knee-jerk reaction," Moncada said.

"We really try to work with the employees and work with the program to help absorb some of the costs so that they don't always necessarily get passed on to the employee."

Stihl Inc., a power tool manufacturer that employs about 2,000 local workers, declined to provide specific information on its health benefits, but attempts to "minimize out-of-pocket impact" on its employees when the company reviews its health plan each year, said Stan Redwood, manager of benefits services.

Mercer reported that between 2003 and 2007, the median family deductible for receiving health care from a preferred provider rose from $1,000 to $1,500.

The statistics are preliminary findings for the National Survey of Employer-Sponsored Health Plans 2008 that Mercer plans to release by the end of the year.

"It's a relief to see cost growth trending down, even slightly," said Blaine Bos, a senior Mercer health and benefits consultant who wrote the survey, in a news release. "But this is not an unqualified success story. While some employers are holding down cost growth with innovative methods of improving health care quality and efficiency, more typically employers struggling with increases they can't handle resort to the tried and true method of shifting cost to employees."

Kathy Adams, (757) 446-2583, kathy.adams@pilotonline.com