Health insurance costs soar 12% in '08
16 05 08 - 10:46
By Roger Fillion, Rocky Mountain News
Employers' health insurance costs this year have climbed 12 percent above 2007 levels in Colorado and Wyoming, a survey shows.
The premiums employers pay for their employees' health insurance have risen less rapidly, at an average rate of 7 percent, according to the Mountain States Employers Council.
The group's survey of 697 employers in the two states suggests that employers continue to face double-digit gains in health care costs but are managing to shift a sizeable chunk of the increase to their employees.
The council's survey also showed a continued increase in the number of employers that offer so-called consumer-directed plans such as health savings accounts. These plans offer workers lower premiums but higher deductibles.
According to the survey, 82 percent of employers had an increase in health care costs this year while 18 percent did not.
This year's overall increase in health insurance costs slightly exceeds the 11 percent jump posted last year.
"It confirms our concerns that the cost of health care is continuing to rise in the double-digit area," said Jim Hertel, publisher of Colorado Managed Care Newsletter, an industry publication.
Hertel said the increasing use of medical technology, such as imaging and implants, as well as higher health care charges, are driving up overall costs.
He also noted that employers are "continuing to shift significant portions of the increase back to employees in the form of higher deductibles and co-pays."
This year's 7 percent premium increase matches the 2007 rise.
According to the survey, 51 percent of employers offer or are considering offering consumer-directed plans such as health savings accounts or health reimbursement accounts.
In particular, the number of Colorado and Wyoming employers offering HSAs as an option in their employee benefit plans totaled 18 percent in 2008. That's up from 15 percent in 2007 and 7 percent in 2006.
Both the employer and the employee fund the HSA, and workers can take their HSA plans with them if they leave the company.
By contrast, an HRA is completely employer-funded, and employees can't take it with them if they leave.
The survey showed that 8 percent of employers offered HRAs in 2008, up from 6 percent in 2007 and 4 percent in 2006.