Time to Prep for Your Health Care Debate
For many Americans it's time to choose: Which of your employer's health care options are best? Rising costs, greater restrictions and new options mean more to consider this open enrollment season.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
October 14, 2004
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Health care was a hot topic of debate between Democrats and Republicans, but very soon it may be an issue debated in the offices and cubicles around your workplace. And the decisions you make could have serious repercussions for your family's economic outlook.
For many American workers, open enrollment season -- the period when you get a chance to make decisions about your health insurance and flexible-spending accounts for 2005 -- is right around the corner.
This is not the year to keep things on autopilot, says Steve Graybill, a senior benefits consultant with Mercer Human Resources Consulting. "You're seeing more dramatic differences in the benefit options than in the past," he says.
You'll need to study your options carefully to figure out which one will save your family the most money next year - and the answer isn't always obvious.
Shouldering more of the costs
Employers have been facing huge price hikes for the health insurance they offer -- with average premiums increasing by 11.2% in 2004, the fourth consecutive year of double-digit growth, according to the Kaiser Family Foundation.
"All employers are trying to balance what they're going to do about these rising health insurance costs for their bottom line and how to keep them affordable to their employees," says Kathleen Strukoff, vice president with Aon Consulting and a member of the Society for Human Resource Management's compensation and benefits committee. As a result, about 75% of employers have changed their health care plan design in recent years, a SHRM study found.
The average cost of employer-sponsored health insurance now tops $9,950 per year for family coverage and $3,695 for single coverage. In turn, employers have been increasing the cost to employees, with families now paying, on average, $2,661 of the annual cost and singles paying $558, the Kaiser study says.
Many employees are paying higher premiums for dependents, especially working spouses who can get health insurance from their own employers. Some working spouses may even be denied coverage by their mates' plan.
Many employees will see their out-of-pocket costs rise when you access care too. Watch for some co-pays to switch from a flat-fee of $10 to $20 per doctor's visit, to a percentage of 10% to 20% of the bill.