KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Business Group: Large Employers Grappling With Health Law Changes

Reuters: As large employers take steps to comply with the health overhaul law, such as removing plans' spending limits and covering more preventive services at no cost to patients, they are also planning to shift more health care costs to workers, according to a report by the National Business Group on Health. The report is based on a survey of some of the group's 72 member companies - including big names, like Wal-Mart and General Electric, though the specific companies making changes are not named. "The report shows companies expected their healthcare costs to grow by nearly 9 percent on average in 2011. That is about two percentage points higher than the 7 percent average increase for 2010, but just one percentage point was linked to the mandated changes under the law" (Lentz, 8/18).

Bloomberg: Some of those new costs will come out of employees' paychecks. "About 63 percent of businesses plan to make employees pay a higher percentage of their premium costs in 2011," the group said. "The survey showed 46 percent plan to raise the maximum level of out-of-pocket costs that workers must bear." That trend is not altogether new. "About 57 percent of the employers in today's study said their workers paid a higher portion of their premiums this year, and 36 percent of the companies increased the out-of-pocket maximums this year" (Young, 8/18).

The Hill: "Business leaders say the benefit changes are necessary to keep companies profitable in the face of skyrocketing healthcare costs. ... The findings are sure to fuel the debate over the reform law's effects on healthcare costs, as the Obama administration continues to tout the consumer benefits surrounding the insurance reforms, and conservative critics continue to blast the changes as a burdensome intrusion into private insurance markets" (Lillis, 8/18).

Another wrinkle is a new tax beginning in 2013 on retiree benefits that has led some firms to revisit such benefits, Fox News reports. "Conservative economic analyst Doug Holtz-Eakin says employers are 'eyeing elimination entirely of a lot of their retiree coverage.' In fact, 69 percent said such benefits are under review, awaiting clarification from the administration, which is just starting to write all the rules and regulations needed to give employers a better sense of how the law will affect them" (Angle, 8/18). 

The Chicago Tribune adds, "[a] key tenet of the health overhaul legislation… will require health plans to cover preventive services by eliminating cost-sharing, such as co-payments or deductibles for services." While employers must develop and finance these programs, there is no guarantee employees will take advantage of them. The business group's research "shows 88 percent of workers lack an understanding of the value of preventive services and more than half, or 56 percent, say they have 'no motivation to stay healthy'" (Jaspen, 8/18). This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.