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HEALTH
CARE COSTS ROCKET< Employees
Vs. Employers
New
Workforce Offerings
HR
Technology Saves Money
Perfect
Storm strikes CEO's
FAQs
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HEALTH
PREMIUMS SWELL, U.S. PUBLIC WORRIED POLL
CHICAGO (Reuters) September 2003-
Americans fret more over soaring health
costs than terrorism and consumers have
more cause for anger as premiums rise at
the steepest rate in a decade, a report
on Tuesday said. Health-care premiums
rose 13.9 percent this year, driven by
steep prescription drug costs, pricey new
medical technology and insurers' profit
gains, a study by the nonprofit Kaiser
Family Foundation found. That is the
sharpest spike since 1990 and there is no
let- up in sight, according to analysts.
The results provide a "perfect
snapshot of our national schizophrenia
about health care," said Gerald
Shea, government affairs analyst at the
AFL-CIO umbrella union. There is a
"pretty broad consensus that this is
unsustainable," he said. "We
can't have health inflation at five times
the rate of inflation. It's going to
break the bank." The poll found that
33 percent of the insured worry that
their income might not keep up with
health premiums, while just 8 percent
said they fear being a victim of a terror
attack. Spending on health care is set to
hit 17.7 percent of U.S. gross domestic
product by 2012, up from 14.1 percent in
2001, according to government estimates.
WORKERS FEEL PINCH, COMPANIES SHOP AROUND
Tussles over rising health-care costs are
at the center of contentious labor talks
between U.S. employers and workers,
including Verizon Communications and the
Big Three automakers. And as the baby
boom generation retires, the numbers of
people on the U.S. retirement health
program, Medicare, will swell. That is
fueling a congressional debate about
adding prescription drugs to Medicare,
which now covers 41 million elderly and
disabled. Workers are feeling the pinch.
Costs paid by workers out of their own
pockets for prescription drugs and doctor
visits jumped by at least 50 percent in
just the last three years, the report
found. For example, workers are paying an
average $29 out of pocket for the most
expensive brand name prescription drugs,
compared with $17 in 2000, the study
found. And in a finding virtually unheard
of just a few years ago, 44 percent of
companies have a separate deductible or
co-payment for hospital services.
Companies are scrambling for better
deals. Sixty-two percent of companies are
shopping around to find a better
health-insurance deal.
HMO PROFITS - Premiums are rising a bit
less rapidly at big companies that take
on the risk of health insurance
themselves, so-called self-insured
employers like General Electric Co. This
suggests that part of the rise in
health-care premiums can be linked to
HMOs' expanding profits, experts said.
Nearly every publicly traded HMO posted
record profits in recent quarters, as
they raise premiums to cope with
underlying cost drivers such as
prescription drugs, hospital and doctor
fees. The Morgan Stanley Health Payor
index of HMOs is up 43 percent this year.
But it is misguided to cast HMOs as
villains because they are just playing
"catch-up" from an earlier
period when premiums trailed cost
increases, said Drew Altman, president of
the Kaiser Family Foundation. When HMOs
start moving into new markets, or compete
by seeking new members, premiums could
begin to decline, experts said. But they
added there is no sign of that yetn this
type of plan if it could reduce total
health care costs. |
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