LA Times Article Highlights the Importance of Health Plans for Employees.

Andy Malinoski
October 31, 2006 — 2,078 views  
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Health costs hurting Voter frustration transfers to economy By RICARDO ALONSO-ZALDIVAR Los Angeles Times WASHINGTON - Frustration with the rising costs of health coverage surged sharply this year, helping explain why many voters remain uneasy about the economy despite falling gas prices, low unemployment and a soaring stock market. The annual Health Confidence Survey, released Wednesday by the nonpartisan Employee Benefit Research Institute, found that more than half of those surveyed -- 52 percent -- were dissatisfied with health-insurance costs, up from 33 percent last year. About 6 in 10 said costs of their health plan -- such as premiums, deductibles and co-payments -- had gone up in the past year. Of those who said their costs had risen, more than half said they were saving less as a result. Retirement plans took a big hit, with 36 percent of those who reported higher costs during the past year saying they had reduced their contributions to 401(k) plans. About 28 percent of that same group said that because of health-related costs, they had trouble paying for such basic necessities as housing, heat and food. ''While people are employed, they don't feel particularly good about their situation, and that ends up influencing how they respond to questions about the economy,'' said Dallas Salisbury, president of the institute, a research group funded by employers, health-care companies and labor unions. Earlier this month, an ABC News/Washington Post poll found that 45 percent of Americans viewed the economy as getting worse, while only 17 percent saw improvement and 36 percent said conditions would remain stay the same. The EBRI poll found that workers regard their employer-sponsored coverage as an ever more valuable benefit, even as many new jobs come with no coverage and employers cut back or drop existing plans. The proportion of employees covered by a company plan dropped from 81 percent in 2001 to 77 percent in 2005. Asked to choose between a $6,700 raise and employer-sponsored health insurance, 75 percent of those polled picked the health plan. Of those, 13 percent said no raise would be big enough to convince them to give up their coverage. The average cost of employer-provided coverage was about $6,700 per worker in 2004. It since has gone up to more than $7,100. After annual increases in health-insurance costs hit double-digit rates in 2001, employers passed an increasing share of the burden on to workers in the form of higher deductibles and co-payments. Such measures have worked to slow cost increases for employers, although they are still running at about twice the rate of overall inflation. Separately, two studies published Tuesday offered mixed reviews for President Bush's main health-care proposal. The White House is encouraging Americans to consider so-called consumer-directed plans, which feature low-cost insurance for major medical expenses with a tax-sheltered ''health savings account'' to cover the cost of routine care. A Rand Corp. report found that such plans could help cut spending and slow the rate of cost increases by reducing the use of medical services 4 percent to 15 percent. However, individuals may offset some of those savings by spending more out of their health savings accounts. The researchers said more study would be needed to determine whether the savings would be a one-time phenomenon or an enduring trend. The second paper, by the California HealthCare Foundation, raised concerns about how such plans would accommodate people with chronic illnesses, who account for a high proportion of all costs. It urged insurers to consider full coverage of certain medications, such as drugs used by diabetics to control blood sugar. That may help prevent patients with chronic conditions from cutting back on needed care and risking costly complications. Although only about 3 million people are enrolled in these consumer-directed plans, the number is growing as large employers add this option to their benefits. The two studies were published on the Internet by the journal Health Affairs.

Andy Malinoski

Vested Health

Andy Malinoski is Vice President of Marketing and Communications for Vested Health. Joining Vested Health in January 2006, Malinoski is an advocate for consumer-driven plans based on real life experience with health care benefits professionally as an employer and personally as a father of three children. Andy oversees the account management, media relations and educational material development key to providing consumers information about how their health plan works and the benefits available to them through their Vested Health plan.