In 2012, the healthcare scene in America is changing with various reforms being already implemented and some reforms kept pending. Current political debates, opposition movements and pending court cases regarding health-care reform points towards an uncertain 2012. Despite the changes in US healthcare industry, employers have no choice but to continue managing these costs for their companies.
In 2012, national medical care costs are expected to increase by 10%. In California, employers may have to shell out an additional 12% for healthcare costs. Healthcare inflation is increasing at levels of 3 or 4 times the degree of national inflation. These trends are expected to continue, creating concern for employers as well as employees struggling to afford medical coverage.
Due to the rising insurance premiums, many employers prefer to discontinue the health coverage given to their employees and prefer to pay a penalty instead. 30% of all employers were likely to drop their health care plans. On the surface of it, seemingly high fines of $2000-3000 would act as a deterrent to prevent employers from discontinuing coverage for employees. However, in truth, such penalties represent only about one quarter of the health insurance costs these employers would have to pay.
According to the California Health Care Foundation (CHCF), higher co-pays and deductibles are also on the rise, a trend that is likely to continue. Employers are looking for creative ways to reduce insurance premiums.
76% of California HMO plans and 65% of PPO plans have co-pays of $10-$20
Less than 1% of all plans offer $5 co-pays, but over 25% of these plans obligate co-pays of greater than $20.
25% of California's employer sponsored plans are high deductible plans of $1000 or more.
The bottom line is that through elevated deductibles and greater out-of-pocket expenses, employers are passing costs on to the employees.