Large companies expect higher health plan price hikes for 2011

Large employers are anticipating faster growth in employee health costs in 2011 compared with 2010, according to a new National Business Group on Health survey. And most are planning health benefit changes despite the risk of losing grandfathered status under the new health reform law.

The survey, based on responses from 72 companies, found that employers experienced an average 7 percent hike in health costs in 2010, and expect an average 8.9 percent increase next year. The four tactics employers considered the most effective in controlling costs were consumer-directed health plans (CDHP), wellness initiatives, increased employee cost sharing and disease management.

The survey offers a broad picture of how large companies are responding to the Patient Protection and Affordable Care Act. To comply with the new law, 70 percent of companies said they will need to remove lifetime dollar caps on overall benefits; 37 percent said they will need to change limits on specific benefits; and 13 percent said they will have to eliminate preexisting condition exclusions for children.

Slightly more than half of the respondents planned to change their benefit plans despite uncertainty about preserving grandfathered status under the reform law, though 19 percent were scaling back changes and 19 percent were making no adjustments due to this concern.

More than 60 percent of companies will offer a CDHP in 2011. Of those offering such a plan, 20 percent reported they will be offering that as their sole option, up from 10 percent in 2010. The most common type of CDHP is a high-deductible plan with a health savings account.

Interest in long-term care was much lower. Just 3 percent of employers had decided to automatically enroll their employees in the reform law's voluntary new long-term care benefit program; 67 percent said they did not plan to participate, and 30 percent said they were still reviewing the issue.

To learn more:
- read the National Business Group on Health survey

Suggested Articles

CVS Health is joining forces with UPS to test several different applications for drone delivery, including sending products directly to patients.

A federal judge won't give the Trump administration more time to repay hospitals affected by $380 million in site-neutral payment cuts.

A group of House lawmakers want CMMI's mandatory kidney care model to be as narrow as possible and change how it calculates payments.