Health Insurance: Rising Costs Affects Employees

Added January 8, 2002 by Ilyce R. Glink

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Summary: As the cost of health care rises, so does the cost of health insurance. As health insurance costs rise, employers are putting more of that extra cost on employees. Employees are facing higher health insurance costs because doctor and hospital fees are going up, as are the prices for prescription drugs.

Anchor: The cost of medical cared is rising and that means the cost of health insurance is going up, too.

Anchor: Money and Real Estate expert Ilyce Glink is here with the details of how the rising cost of health insurance could affect your wallet.

GOOD MORNING

Ilyce: Last year, the cost of health care benefits rose more than 11 percent. This year, health insurance costs are expected to jump 13 percent. Worse, employers are pushing more of the burden of health care onto employees, which means you'll pay more than ever for the same care.

Why are costs going up? Some of the reasons include higher doctor and hospital fees. Mergers are giving hospitals more clout in negotiating fees and some doctors are fed up with the low amount they're reimbursed by HMOs. To keep patients and appease government regulators, HMOs are having to offer consumers more freedom and fewer restrictions in choosing doctors. An aging workforce means your insurance dollar is covering more sick people. And finally, drug costs are soaring. Spending on retail prescription drugs increased 19 percent in recent years, plus it's costing companies more to develop drugs and bring them to market. What does all this mean for the consumer?

Health Care Costs Going Up

Higher deductibles and co-pays Higher insurance premiums Some companies dropping insurance

Ilyce: As the cost of health insurance rises, and more people are unemployed, the number of individuals without health insurance also goes up. But you don't want to join those ranks. If you're laid off, federal law requires employers to make health insurance available through COBRA. You'll get 18 months of coverage, and will hopefully be able to find a new job with benefits before that time is up. But if you're getting insurance under COBRA, expect to pay the full ride, which could BE three times as much as you've been paying. If you're married, and both spouses work, try to choose employers that provide health insurance. That way, should one of your companies drop health insurance, another can pick up the family coverage. How can you lower your health insurance costs? That's the big question. In many cases, you can't do much except raise your deductible. If your company offers a cafeteria plan, you could put more away, pre-tax, to pay for items like prescription drugs, glasses and contacts, or other medical expenses. Finally, if you're self-employed and healthy, shop around -- although the choices are getting more limited.

Dec. 7, 2003.

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