Thread: It's health enrollment time, and premiums likely to rise

It's health enrollment time, and premiums likely to rise

By Sandra Block, USA TODAY

The debate in Washington about health care changes is generating a lot of heat and strong language, dividing families and turning neighborhood barbecues into backyard brawls. But on one point, there's little debate: Workers will pay more for health insurance next year.

During this year's enrollment season, you probably won't see any major changes in your company's coverage, says Karen Frost, health and wellness outsourcing leader for Hewitt Associates. Most employers are forgoing significant overhauls of their plans until health reform legislation is enacted, she says. Instead, they're continuing efforts to control health care inflation — and that often means requiring employees to shoulder a greater share of the bill. Hewitt projects that the average employee's contribution to premiums and out-of-pocket costs will increase 10% in 2010 (see box).

How these changes could affect you:

•Co-insurance instead of co-payments. Co-payments of $10 or $15 are going the way of the dinosaur, says Tom Billet, senior consultant for Watson Wyatt. Instead, employers are increasingly requiring workers to pay a percentage of their health care costs.

Employers believe co-insurance makes employees more aware of the health care costs, Billet says. Co-insurance also indexes the employee's out-of-pocket contribution to health care inflation, he says.

What you can do: If you take prescription drugs, switch to generics. While companies are increasingly requiring co-insurance for prescription drugs, some continue to charge a co-payment for generics, Billet says. Some companies will also pay 100% of the cost of medications that reduce the likelihood you'll require hospitalization. A drug to treat high cholesterol falls into that category, Billet says.

•More high-deductible plans. With these plans, workers accept a higher deductible in exchange for lower premiums.

To make these plans more attractive, most large companies offer health savings accounts with their high-deductible plans. These accounts allow workers to put aside pretax dollars for deductibles and unreimbursed medical expenses.

Twenty-eight percent of employers with 1,000 or more workers offered a high-deductible plan with a savings option in 2009, up from 22% in 2008, according to the Kaiser Family Foundation. The number of companies that offer these plans will continue to increase because they're less expensive than traditional plans, Billet says.

What you can do: If you're healthy and don't file many insurance claims, a high-deductible plan could save you money. But keep in mind that if you get sick, you could be on the hook for a lot of money. For 2010, the minimum deductible required for a plan with a health savings account is $1,200 for a single worker, or $2,400 for a family.

Some workers with high ongoing medical expenses could also save money by enrolling in a high-deductible plan, Frost says. Many high-deductible plans pay 90% or more of health care expenses once you've hit the deductible, vs. 80% for a typical preferred provider plan, she says. As a result, some chronically ill people could end up paying less under a high-deductible plan than they would with a traditional plan, she says.

•More dependent audits. Many companies are conducting audits to make sure that all of their employees' dependents are eligible for coverage.

Ineligible dependents often include older children who have dropped out of college or graduated, says Mark Rucci, senior vice president at Gallagher Benefit Services in Princeton, N.J. Some employees also continue to claim former spouses as dependents, he says.

In most cases, dependents who are found to be ineligible are simply removed from the plan, Rucci says. But claiming an ineligible dependent on your insurance policy could cost you your job, he says.

What you can do: Annual enrollment is a good time to review your dependents and make sure they still qualify for coverage, Frost says.

If you discover that a child no longer qualifies, or you've recently gotten a divorce, you can drop these individuals from your plan without penalty, she says.

You should also make sure you can provide proof that the dependents you claim are eligible, Rucci says. In an audit, you may be asked to produce tax returns, marriage certificates, birth certificates, adoption papers or legal guardianship forms, he says.

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com. Follow on Twitter: www.twitter.com/sandyblock

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I just want the gov't to back off from our health care. They seem to hurt us or destroy everythng they get their hands on. It never fails as soon as something seems like it might actually be helpful to us some other set of circumstances is presented and another scam pops out.