Code Green

It Makes You Sick!

by: John Mangan, Cincom Systems

Americans are Having a Harder Time Paying
Medical Bills, and It’s Making Them Sick (Literally)

I know that isn’t surprising. We all have been feeling the healthcare pinch due to increased premiums and higher deductibles coupled with the insidious co-insurance. But because of these increased costs, some Americans are discouraged to access adequate healthcare.

According to a new national study by the Center for Studying Health System Change (HSC), Trade-Offs Getting Tougher: Problems Paying Medical Bills Increase for U.S. Families, 2003-2007, published in September 2008, the percentage of Americans in families with problems paying medical bills increased from 15.1 % in 2003 to 19.4 % in 2007. That’s more than 57 million Americans who have problems paying for healthcare - an increase of more than 14 million since 2003.

The scary part is that this trend is not just hurting our wallets, it’s effecting our health. The Kaiser Family Foundation survey, April 2008, Survey Brief: Economic Problems Facing Families, reports that 42% of those surveyed postponed healthcare procedures or medication in the past year because of cost. And even more troubling, 66% who postponed healthcare recommendations actually got sicker.

There is no remedy in sight. Healthcare reform is being pushed to back the burner. Early in this year’s US presidential campaign, healthcare reform was one of our top concerns. It seemed that finally healthcare was going to get addressed no matter who got elected. But now only 5% of Americans feel that healthcare is still a top issue. It has long been replaced by the economy. Once the government bails out Wall Street, there will be little left to address healthcare. Americans will continue to see their health costs grow and will postpone or avoid the care and services they need.

Glossary of Consumer Directed Products

Source:  PricewaterhouseCoopers and HealthLeaders

Flexible Spending Accounts (FSAs)

• An employer bookkeeping account for medical expenses generally funded by employee pretax contributions
• Often offered as a separate component of a cafeteria plan (a plan that provides employees with a choice between taxable cash and nontaxable benefits for unreimbursed medical or dependent care expenses)

Health Reimbursement Arrangements (HRAs)

• Medical plan funded entirely by the employer that reimburses the employee for qualified medical expenses.  Cannot be offered through a cafeteria plan

High-Deductible Health Plan (HDHP)

• A health insurance plan with a deductible requirement of typically at least $1,000 for health plan coverage
• The HDHP must meet certain legislative and regulatory requirements in order for plan participants to become eligible to contribute to MSAs and HSAs

Health Savings Accounts (HSAs)

• A portable, personal account for the payment of qualified medical expenses
• Individuals must be covered by a high-deductible health plan to contribute to an HSA
• Account's earnings are not taxed
• Not available to individuals covered by Medicare, persons who can be claimed as a tax dependent, and those covered by a health plan that is not a HDHP
• Can be funded by an employer, employee or other individual

Automated Intelligent Guidance Blog

The team that brought Automated Intelligent Guidance to Healthcare has started a blog to keep us abreast of the developments in this exciting area. Check it out here.

Study: Workers to Pay More for Healthcare

Source:  AP/Yahoo News

Get ready for another hike in copays and deductibles. A survey being released Thursday by the Mercer consulting firm found 59 percent of companies intend to keep down rising health care costs in 2009 by raising workers' deductibles, copays or out-of-pocket spending limits.

On average, health care costs will go up by an estimated 5.7 percent next year for both workers and their employers, the study found. That repeats this year's 5.7 percent hike and a 6.1 percent jump in 2007.

The growth of health care costs has hovered at around 6 percent since 2005, according to Mercer. While that's down from the double-digit growth in previous years, it's still moving at a faster clip than inflation or workers wages.

"It's not something to cheer about, especially since costs are getting passed on to employees," said Blaine Bos, author of the survey.

The results were preliminary findings, with about half of the 3,000 large companies surveyed reporting. Preliminary findings for the annual survey have historically been in line with final results.

Between 2003 and 2007, the average deductible for an individual grew from $250 to $400. For a family, it rose from $1,000 to $1,500, according to Mercer.

Deductibles are the amount workers pay for medical care out of pocket. Once workers spend that amount, they begin sharing costs with employers, with the company covering an average of 80 percent.

Health plans are trying to rein in costs by offering choices such as disease management plans and incentives for greater use of prescription drugs, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a trade association representing nearly 1,300 insurers.

"But there's certainly still more work to be done," Zirkelbach said.

He said AHIP has proposed a number of policies and measures to further curb costs.

The Mercer survey also found 47 percent of companies are encouraging enrollment in plans with lower premiums and higher deductibles.

Additionally, the survey found 19 percent of employers will start offering a consumer-directed health plan. These are high-deductible plans with employee-controlled spending accounts. They encourage employees to consider costs when by letting them save account money they don't spend for future needs.

Last year, 12 percent of all employers said they were "very likely" to implement such a plan by 2009.