Health insurance premiums rising more slowly
As employees make choices for next year, monthly cost isn't only factor to consider
Published: Saturday, November 22, 2008 at 4:20 a.m.
Last Modified: Saturday, November 22, 2008 at 5:56 a.m.
Thousands of Sonoma County workers are facing decisions about their health insurance, with many employer-sponsored insurance plans entering their annual open enrollment period.
Premiums continue to march upward but by and large seem to be in line with a trend seen last year: rising, but at slower rates than in the first half of the decade, when they rocketed higher and buffeted the local health care market.
Insurance brokers who negotiate health plan packages for local companies say they are seeing some premium increases below 10 percent this year -- although depending on the plan and company size, some increases are far higher.
"It's all over the board," said Bud Martin of ABD Wells Fargo Insurance Services in Santa Rosa.
"It depends a lot on the size of the group and what kind of benefit structures they have," he said. "Sometimes it's 10 or 11 percent, sometimes it's 17."
Nationally, the annual cost of family coverage under employer-sponsored plans reached an average of $12,680 in 2008, up from $5,791 in 1999, according to the Kaiser Family Foundation, a nonprofit health research group. Employees' share of that annual bill hit an average of $3,354 last year, up from $1,543 in 1999.
Experts caution that workers shouldn't choose a plan on premiums alone, but should take into account factors such as how much they expect to use health care services.
"Often employees will just choose the plan that sounds the best or the name that sounds the best," said Debra Squyres, director of human capital consulting at TriNet. For example, an employee might choose a "Platinum" plan over a "Value" plan "not knowing really how that plan works," she said.
The San Leandro-based firm provides human resource outsourcing services including benefits management to about 900 Northern California firms.
Some plans, said Squyres, are not raising their premiums as much, but are offsetting that by increasing their patient deductibles, co-payments and out-of-pocket maximums.
That's not necessarily bad, because people who use their health services less may find that option more sensible and cheaper. But it illustrates why plans need to be carefully examined, Squyres said.
For instance, while it's obvious that high-deductible plans might better suit young and healthy people, others with health conditions that require them to see the doctor frequently might want to go that route also. That's because they might visit the doctor often enough that they would quickly reach the point where all services are fully covered, Squyres said.
One key factor in the case of lesser increases is, again, Kaiser Permanente, whose size and reach put a downward pressure on other plans.
In Sonoma County, Kaiser has 170,793 members, and its share of the local market tops 60 percent.
About 75 percent of Kaiser members in the county belong to employer-sponsored plans, said Kaiser spokesman David Ebright.
Kaiser is "a major important factor. They're so large and they're very competitively priced," said Deborah Bezona, president of D. Bezona & Co., a Santa Rosa employee benefits consultant.
Another expert in the local market said increased deductibles may be playing a role.
"Many people are not using their plans as much because they can't afford the deductibles and co-pays, so it has brought usage way, way down," said Bob Shirrell, a longtime Santa Rosa health care industry consultant.
In the long term, Shirrell said, that leads to greater costs as people who avoid preventive and early stage health care end up in emergency rooms with more serious conditions.
But in the short term, he said, "it will result in a decrease of rates or at least less of an increase."
Bezona, whose clients are generally smaller employers, said she's "seen rate increases from 3 percent to a high of 20 percent."
"From my perspective," she said, "anything under 10 percent, we feel happy about. Some of our clients aren't, but if we see a rate increase under 10 percent, we're ecstatic."
You can reach Staff Writer Jeremy Hay at 521-5212 or via his news blog haymaker.pressdemocrat.com.
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