Survey: Big Employers Expect Health Benefit Costs to Go Up 7% in 2014

Large employers expect their employee healthcare benefit costs to increase by 7 percent on average in 2014, according to a survey by the National Business Group on Health, a nonprofit employer association.

The survey was conducted in June, prior to the Obama administration's announcement that the Patient Protection and Affordable Care Act's employer mandate will be delayed by one year to 2015. Under the employer mandate, businesses and companies with 50 or more employees are mandated to offer health insurance to those employees or pay a penalty. The rule was originally slated to begin January 2014.

The survey also found 41 percent of employers expect COBRA plan participants to find that buying coverage through the new exchanges is the most cost-effective option in 2014. Additionally, 26 percent think retirees under 65 years of age might decide to buy coverage through the exchanges, while 20 percent believe part-time employees will turn to the new markets.

Furthermore, 36 percent of respondents viewed consumer-directed health plans as the most effective way to contain costs. Consumer-directed health plans are high-deductible health plans associated with savings account options to cover out-of-pocket costs. A study released earlier this month by the Employee Benefit Research Institute found that plan structure reduced healthcare spending by 25 percent or $527 per person in the first year compared with the year before the plan was adopted for one large Midwestern employer.

However, other studies have suggested high-deductible or consumer-directed plans might have disadvantages for enrollees and hospitals. Hospital owners such as Dallas-based Tenet Healthcare Corp. have reported more bad debt pressure tied to high-deductible — also known as consumer-directed — plan enrollees. Additionally, patients with low socioeconomic status enrolled in a high-deductible health plan may skip needed emergency care due to high out-of-pocket costs, which may lead to higher rates of hospitalization, according to a study in Health Affairs.

More Articles on High-Deductible Health Plans:
Study: High Deductible, High Savings Account Plan Cut Employer Costs
Unpaid Hospital Bills on the Rise for High-Deductible Plan Members
Study: Poorer High-Deductible Plan Members May Skip Needed ED Care 

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