Health Care & Banking: Employers Passing on Health Care Costs

When it comes to employee health benefits, higher deductibles and costs are increasingly being passed on to employees, said an official for an association whose 20,000-strong membership includes health insurance brokers.

Scott Leavitt, president -elect of the National Association of Health Underwriters, said more employers are electing to pass on the costs of health benefits as health insurance premiums continue to rise.

"The days of the low deductible are gone," said Leavitt , who lives in Boise, Idaho . Instead of a $250 deductible, deductibles twice and quadruple that are increasingly becoming the norm, he said.

One way employers can save money is to offer high deductible health savings plans, he said. These plans route pre-tax savings to a health savings account.

Another trend among employers, Leavitt said, are limited benefit plans. Designed like a preferred provider option plan (PPO), Leavitt described limited benefits as "stripped down" plans with select benefits carved out.

Typically, these plans also permit a set number of visits to a doctor, which ultimately lead to less doctor visits by the beneficiary — and more savings industrywide — when the employee only sees a doctor when seriously ill, Leavitt said.

And pharmaceuticals are not safe from the chopping block, either. When once unlimited drug plans were a ubiquitous part of health plans, limitations are now being placed on prescriptions, too, he said.

Health maintenance organizations — or HMOs — are also losing popularity to PPOs, which offer more choice, he said.

"This has been going on for a while," Leavitt said, noting that the last few years has yielded higher premiums. "The next thing you know, your premiums are double what it was five years ago."

Capstone Brokerage Chief Executive Jade Anderson said that while premiums are still going up, they aren't increasing as much as they were in the past.

One reason for the relative slowdown is that many big players have moved into the Las Vegas market, such as Aetna, Cigna and Anthem insurance companies, Anderson said. And as insurance companies start to make more money, they have the ability to drive down costs in order to compete and gain more market share.

"More carriers are eyeing the market," he added.

"I don't see us going into a soft market," he said. "It's a very encouraging direction the market is headed. We're approaching the end of the storm."

As people are forced to more closely consider their health care options, the silver lining is that more people will become educated about their own health, and what health care costs not only the consumer, but the industry as well, Leavitt said.

"People need to become concerned with their own health care," he said. "They need to know what their health care costs. Health insurance is expensive because health care is expensive. Health insurance is the financing of health care."