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Employers Scale Back Insurance Contributions By Axing Family Plans

February 25, 2013 by  

Employers Scale Back Insurance Contributions By Axing Family Plans
PHOTOS.COM

Most employer-supplemented health insurance plans have long given workers the option either of electing single-patient coverage for themselves or a family plan that includes spouses and children.

If you have a job with employer-sponsored insurance, you likely know the difference in cost between an individual coverage policy and a family policy. And that difference — for yourself and, often, for your employer — is vast.

If you aren’t a government employee and your employer is paying half your single-coverage premium (or more), the chances are good that they’ve made a very conscientious — perhaps even a financially painful — decision to assist you with your healthcare costs. Take offense, but call it charity.

Yet the exigencies of the changing healthcare business are gradually informing many employers’ decisions to scale back their contributions to employee premiums.

Most often, the self-imposed frugality is coming not in the form of business owners reducing their contributions to individual premiums. Rather, employers are eliminating sponsored family coverage policies altogether, while focusing on what they can do to keep individual coverage affordable.

A Marketwatch story attributes the change to employers who anticipate absorbing increased per-patient expenses as the timeline for the Patient Protection and Affordable Care Act slowly unfolds. Historically, many employers have offered subsidized coverage only to their own workers’ individual plans — if, that is, they have working spouses who’re eligible for single coverage at their own jobs.

But with Obamacare proffering health coverage even for those who don’t have jobs — and there are plenty of spouses who don’t — companies that once offered family coverage are, understandably, finding less incentive to go the extra mile.

Research and analysis released Friday by the Gallup-Healthways Well-Being Index concludes it’s still difficult to predict how pervasive such changes could ultimately become or how Obamacare policies will affect employers’ decisions:

Beginning in 2014, under the Affordable Care Act, large employers will be required to pay a fee — called an “assessment” — if they do not provide adequate insurance coverage and their employees receive tax credits to buy their own insurance. Whether this creates an incentive for employers to provide affordable coverage, or whether they will simply pay the penalty remains unclear, thus the future direction of the employer-based insurance rates in the U.S. is yet to be determined.

But human nature is self-interested, and it’s reasonable to expect that many employers won’t voluntarily subsidize insurance policies for those spouses who soon may be covered by an expanded Medicaid program.

Much will depend on just how damaging the new law’s punitive “assessment” fees may wreak on small businesses’ bottom lines.

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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  • FreedomFighter

    Obama Care killing America one day at a time.

    Laus Deo
    Semper FI

    • eddie47d

      You’re being naive again Freedom Fighter. Businesses have been cutting costs and benefits to workers for the last two decades. Health care benefits have long been the target of companies. What CEOs giveth they can taketh away and the Affordable Health Care Act is just another convienient excuse for them. They’ve been doing the same with pension plans,salary increases,sick leave and vacation time. Maybe you should be asking the question why are CEO benefits and salaries going up yet benefits for others are going down. They are the culprits “killing America one day at a time”.

      • MIKE

        Not so everywhere!! Some of us work for very good companies that love their employees, since their kids are” working up the ladder” like we are. Hence, bad policies will hurt their children and grandchildren.

    • jopa

      FF; And what charity is paying for your health insurance.It is apparent you don’t work and I believe you are probably mooching off the taxpayers yourself, RIGHT.

      • Dave67

        FF is living off socialized medicene if he is former military. He is getting a sweet deal on the taxpayer’s dime. If he was a solider in the military and actually got dirty fighting in our wars, I have no problem with it. Since we do not support military people like we should, this is one of the few ways we actually help military people and their familes.

        During the Iraq war most people were too busy with getting Bush’s tax cuts rather than sacrificing to win the wars Bush started but thats a whole other subject.

        Anyone who is military is living off of socialized medicene and to say anything against Obamacare or systems like France’s is a tad hypocritcal to say the least.

      • FreedomFighter

        Donald Trump shares his ideas on becoming rich
        http://www.youtube.com/watch?v=hepk_CR42uA

        Laus Deo
        Semper FI

      • stanli richardso

        looks like you took your unprofessional rude pills this morning

      • MIKE

        People who serve their country in the military and are retired are not moochers. That was a part of their compensation package, if they lived long enough to recieve it. Once again, you are rude and you need to get help on manners.

    • rendarsmith

      And the costs are already screwing us. I’m taking less home this year than I was last despite a 3% raise, all because of increased health care costs and SS taxes.

  • DavidL

    Instead of just repeating the talking points from the extreme right wing Republican/Conservative bat-crap-crazy crowd, it is better to do some research and reading about what is best for us and our family. Of course, avoid Fox news and their affiliate gang of lying thugs. Do real research and analysis. Here is some help:

    http://www.pnhp.org/
    http://www.medicareforall.org/pages/Universal_Health_Care_Tends_to_Cut_the_Abortion_Rate
    http://www.healthcare-now.org/
    http://www.healthcare-now.org/

    Everyone is entitled to see a doctor. The employer based healthcare system is ineffective, expensive, and unfair to business and should be replaced with universal healthcare paid for through income taxes. No employer pays. No premiums, No deductibles, no pre-existing conditions as an excuse for denial of care. No medical bankruptcies. No resulting death because the patient can’t afford to pay to for care and treatment. Single-payer Medicare for all. You know, OUR version of socialized medicine just like we have OUR version of socialized military, police, public education, Social Security, Medicare, Public Libraries, etc.

    • MIKE

      You are rude! Please use manners, or get help on how to use them when in public discourse.

  • Dave67

    Thinking people need to read the latest Time Magazine article on the subject of high medical costs.

    1. Routine Care, Unforgettable Bills
    When Sean Recchi, a 42-year-old from Lancaster, Ohio, was told last March that he had non-Hodgkin’s lymphoma, his wife Stephanie knew she had to get him to MD Anderson Cancer Center in Houston. Stephanie’s father had been treated there 10 years earlier, and she and her family credited the doctors and nurses at MD Anderson with extending his life by at least eight years.

    Because Stephanie and her husband had recently started their own small technology business, they were unable to buy comprehensive health insurance. For $469 a month, or about 20% of their income, they had been able to get only a policy that covered just $2,000 per day of any hospital costs. “We don’t take that kind of discount insurance,” said the woman at MD Anderson when Stephanie called to make an appointment for Sean.

    [Cut and paste article edited. Please use links]

    Read more: http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/#ixzz2LuzKuWKi

    American greed people and an aging population, not Obamacare… There is your reasons for the high price of HC. As long as the employer and the insurance company control the game, the insurance companies, the “not for profit” and for profit hospitals, big pharma, the medical technology industry, doctors will all continue to bleed us dry.

    • Steph

      So maybe Obama if he wanted to do something useful would have went after why the costs are so high in the first place. Once the costs are brought into a more realistic world amount then a national health care system may have worked.

      My dad was in the hospital for almost a week (6 days) after a cancer operation, non ICU just standard room. The hospital bill came to just under $27K and that was not counting the operation, any of the meds, and doctor visits which came to another $37K on top of the $27K. Thankfully he had a private insurance which covered about 95% of it.

      • Dave67

        Steph,

        Once the insurance company-employer model became the standard. The working person is no longer the end user of HC. Your company is. Today, we have millions more baby-boomers retiring and using more HC than younger workers entering the workforce so the money paying into the system is not offset. Then throw on top of it all, good old fashioned American greed by the insurannce, pharma, hospital, medical device industries and the doctors. That made things more expensive. Once big mopney is involved, that gets the bloodsucking lawyer industry’s attention and they try and get their piece of the action.

        It all adds up to higher HC costs.

        Obamacare does a very positive thing by mandating that most of an insurance company’s premiums they charge has to go to actual care and not Insurance Company CEO’s that were making 10′s of millions of dollars a year.

        The system needs to be taken back to the days where medical relationships centered on the doctor and the patient and not two company’s who main goal is money and not care.

    • eddie47d

      He did and the Republicans refused to cooperate and we had to keep the corporate gougers (United Healthcare, Aetna,etc.) in place. One big problem is that we have too many NON-PROFIT Hospitals. They sounds so charming and helpful (and some are) yet most make more money than for profit hospitals. In order to keep those profits they have to find ways to get rid of that money so they pay exhorbant CEO salaries and add wings onto their hospitals. Those non-profits also build new hospitals even when there isn’t any need for them. We have a glut of hospital beds in America yet they keep building. They are awash in money yet refuse to reduce costs so the consumers keeps paying. Stamford Hospital (Conn) charges 11 times the cost of a service or product. An example would be this lady who felt chest pains and it ended up being heartburn. The bill came to $21,000. Which hits the owners of companies and what they can afford as benefits.

      • Dennis48e

        “He did and the Republicans refused to cooperate …”

        That is a flat out lie (of course what else would you expect from eddie). Obama had a filibuster proof majority in the Senate and a super majority in the house when obama care was passed and could have easily included anything they wanted. The Republicans had no say in what happened or went into the bill.

      • eddie47d

        Republicans refused a single payer plan and endorsed keeping those mentioned healthcare companies and their deceitful policies in place. The Republicans endorsed that corruption (greed) and Obama was rather forced to go along with their plan or lack of one. Don’t kid yourself the Republicans were involved Dennis!

        • MIKE

          Who was in charge of the Presidency and the House and Senate in 2010??

      • Dennis48e

        ” Don’t kid yourself the Republicans were involved Dennis!”

        Freudian slip there eddie. Exactly what I said the Republicans had no say in the obama care bill. In any case it doesn’t matter if they contributed anything or not since as I said above the democrats had total control the Republicans would only be able to include something the dems wanted in the bill anyway.

    • John Mitchell

      Dave,
      Health care costs are expensive because of insurance. Insurance is an unnecessary middle man that accounts form about 3/4ths of all health care costs. Insurance is not healthcare but we have been fooled into thinking this by our government and Doctors.

      Here are 6 problems that I have with health insurance in general.

      First. Only a small percentage of what you put into the insurance industry can escape the insurance industry. Most of it is spent on salaries, executive bonuses, buildings, corporate jets, advertising, etc. It is estimated that most large corporations and governments consume 65% to 85% on their own overhead. 37% of your insurance dollar is spent on revenue.

      Second: The insurance industry is deliberately driving up the cost of health care in order to conceal the amount of money they consume. They only pay between 20% and 60% of the bill presented by the doctor) This way they can appear to pay between 40 to 80% of the bill without actually paying anything. In other words, you fork over money to the insurance company, who demands the doctor present you with an artificially high bill so they can pretend to pay a portion of the bill for you. The doctor has to contractually agree to this or the insurance companies won’t list him as a plan participant.

      Third: I am not the customer. The first question a health care provider asks me is “who is you insurance company?” This is code for who is the customer? Once they know who the real customer is they push me off to the corner and treat me like a taxpayer at the department of motor vehicles. The doctors are not interested in my health, they are only interested in having me fill out the forms so they can bill their real customers.
      They want to do as much work on me as possible so they can bill the insurance company as much as possible. They are driving up the cost of health care by billing me for work that isn’t needed. One facility wants to do MRI’s, x-rays, and blood tests every single time I walk through the door, even if all I want is a speck of dust taken out of my eye. If everyone paid their own bills they would not stand for this. They would only pay for services they needed and then the services would be tailored to please them, the customer.

      Fourth: Only a percentage of the revenue received by a health care facility is actually spent on health care. A large percentage is spent trying to get paid by the insurance companies. Just look around in any hospital. Most of the people working there are administrators trying to find creative ways to bill and recover payment from the insurance industry.

      Fifth: There is an enormous amount of insurance fraud each year. My congressman tells me that last year there was an estimated $452 billion dollars in healthcare fraud. (Mostly in Medicare because the government is involved) When the customer is big, like insurance companies or government, fraud is rampant. The end consumer eventually pays for all the fraud.

      Finally, as the government gets more involved price inflation will skyrocket. Look at any sector that gets funding from the government and you will see that those sectors have suffered a disproportionate amount of inflation. Look at real estate, defense, and education as examples. Prices on homes, military hardware, and college tuition have gone up by a factor of at least 6 over the past 30 years while prices on gasoline, food, and electronic prices have remained relatively stable. (Even gasoline has only doubled or tripled in the past 30 years while our supply has substantially dwindled and demand skyrocketed!)
      Inflation always goes up when the government is throwing money at it. It is too easy to overcharge for a product when the government is buying. This drives the price up for everyone.

      When did health insurance become healthcare providers? Health insurance should not be used to pay for healthcare. It should only be used for catastrophes like any other insurance. Imagine having a transportation or housing provider. Why not have our car insurance pay for gas, new cars, tires, oil changes etc. Why not let home insurance pay for toilet paper, furniture, new homes, light bulbs etc. All we would have to do is pay a middle man a monthly sum and he would pay a very small percentage of that to buy us the daily products we need. We would not be able to afford to drive or live in a house. So why do we do it with health care.

      I used to get up to an 80% by paying cash but I cannot do it in Texas because insurance companies contractually force the doctors to charge more than twice what they want to for services to make it appear that insurance is paying for some of it.

      Healthcare is only expensive because we use insurance to purchase all of our healthcare instead of using insurance for disasters as originally intended. Only the insurance companies make money in healthcare.

      • John Mitchell

        37% of all insurance revenue is spent on advertising, not revenue. I should have proof read better.

      • John Mitchell

        I used to get up to an 80% discount for paying cash instead of using insurance. i can’t do that in Texas because the insurance companies force the doctors to sign contracts that don’t allow discounts. If he wants $100 for particular service he needs to charge up to $250 to get a combined $100 from the insurance company and patient. You think you are only paying $85 dollars for the service and the insurance is paying $165 when in fact they are only paying $15.

      • MIKE

        You say you used to pay cash for your doctor bills and paid 80% less for it. How did it work and did it change, and why? Thank you for your reply!

        As another footnote, Obamacare has exemptions to it’s requirements for healthcare coverage outside of gov’t or private insurance, without penalties. One would have to belong to an Indian tribe,sect that takes care of their own(Amish), or belongs to a health care ministry(Health Care Ministry, Samaritan Ministries, and Medi-Share). Hope this will help those who are struggling!!

      • Dave67

        Hi John,

        I am in agreement with you. We as patients are not the end user of HC so the “free market” idea is thrown off track right then and there. When you get sick or hurt, you don’t shop hospitals to find the best “deal”. They know this.

        A corporation’s first goal is to make money. They are niot well suited to provide people proper care.

  • eddie47d

    The main reason the the Affordable Health Care Plan will continue to be expensive is because it will still be run by private insurance groups. Those private companies are the ones who cherry picked who they would accept and who they would reject. They even denied coverage for procedures even if you were covered so why have insurance if it won’t do you any good. The corporate market on drugs (Big Pharma) is unbelievable so why isn’t that being addressed in rising costs and unaffordability of healthcare? Hospitals notoriously gouge anyone who walks through their doors. They commonly charge thousands for unnecessary tests and procedures because they can, not because they have to. Lab tests and X-rays can cost many thousands yet a person who is over 65 and on Medicare will only pay a few hundred for the exact same tests. Costs can be held down yet hospitals choose not to. At MD Anderson Cancer Center in Houston 660mg of Rituximab costs about $4,000 yet the hospital charges almost $14,000. The President of this hospital ears $1,845,000. Some folks can’t see the disconnect in why healthcare is so expensive yet it is as plain as the nose on our faces. When companies draw up their budgets and benefit packages they have to consider what these hospitals and insurance companies are doing to their bottom line.

    • momo

      Obamacare does nothing to cut costs, they’re not even addressed in the bill. The logic behind it was to get everybody in the insurance pool and individual costs would go down. so far its not happening. No tort reform, hence the need for all those tests the doctors run, they need to cover their butts, throw in malpractice insurance and you can see why costs are so high.

      • eddie47d

        Officially the AHCA doesn’t cover the majority until next year and it will take a couple more years to work out the kinks. I’m sure there will be many. Now tort reform will help slightly yet it is only 1-2% of all medical costs in the US. I agree there should be a cap on any medical error yet the ability to address those grievances should always be there. Once a medical machine (such as a CAT Scan) is paid off the rest is pure profit for years to come. The doctors who recommend a CAT Scan or whatever receive a bonus by the hospital such as Stamford Hospital. We are being milked to say the least.

  • Carol

    This will be horrible for most families because they really can’t afford the expensive insurance that is out in the streets that is why they take the insurance the employer offers so to me this is NOT fair to the employee not at all.

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