While health care costs increases continue to far outpace inflation, costs are rising at a far more moderate pace than a few years ago, according to two surveys released last week.

The surveys-one by the Washington-based Kaiser Family Foundation and Chicago-based Health Research & Educational Trust, and the other by Stamford, Conn.-based benefit consultant Towers Perrin-also show that employers are turning more to consumer-driven health plans to help control costs.

While the KFF/HRET survey found that a large proportion of employers are using cost-shifting to address the problem, the Towers Perrin survey found that some large employers are trying to mitigate cost increases through a variety of health management techniques.

The KFF/HRET survey found that health benefit costs rose about 5% this year, with single coverage for all types of plans averaging $4,704 and family coverage averaging $12,680.

Meanwhile, the Towers Perrin survey projects a 6% increase in health benefit costs for employers next year, with single coverage averaging $4,860 and family coverage averaging $14,244.

Those increases, while substantially higher than general inflation, are substantially lower than a few years ago when double-digit annual increases were the norm.

Employers have been addressing this escalating expense by cutting back on coverage and shifting more of the cost burden to workers through higher premiums, deductibles and other out-of-pocket costs, according to the KFF/HRET 2008 Employers Health Benefits Survey.

Deductibles in preferred provider organization plan grew an average of $99-to$560-in 2008. Perhaps more striking was the surge in high-deductible health plans. This year, 18% of workers are enrolled in plans with deductibles of $1,000 or more, up from 12% in 2007 and 10% in 2006, the KFF/HRET survey found.

High-deductible plans were even prevalent among plans sponsored by small employers, defined as those with three to 199 employees. While just 9% of workers at large employers are enrolled in high-deductible health plans, 35% of those at small employers are this year. In 2007, 8% of employee’s at large employers and 21% of those working for small employers were enrolled in high-deductible health insurance plans.

The KFF/HRET survey also found that the share of employees enrolled in consumer-driven plans-high deductible plans that include a tax-preferred savings option such as a health savings account or a health reimbursement arrangement- -grew to 8% this year, compared with 5% in 2007 and 4% in 2006.

Like HDHPs, the growth in CDHPs occurred mainly among small firms, where 13% of employees are now enrolled in this type of plan, compared with 8% in 2007. By contrast, jut 5% of workers at large employers in enrolled in such plans, statistically unchanged from last year.

The reason many employers are turning to HDHPs and CDHPs is because premiums are lower than other types of health plans, averaging $3,922 for single coverage and $10,121 for family coverage, according to the KFF/HRET survey.

Researchers at Towers Perrin also found CDHPs to be emerging as a solution that many large employers are embracing, with more than half of the companies surveyed currently offering or planning to offer such plans in 2009, up from 46% this year.

The 2008 KFF/HRET survey, at http://ehbs.kff.org/, included responses from 1,927 randomly selected public and private U.S. employers. It was conducted by telephone between January and May.

The 2009 Towers Perrin survey, available in the “press” section of http://www.towersperrin.com/, included detailed information on the health benefit programs offered by 321 of Fortune 1000 companies included in Towers Perrin’s health care cost database.

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This entry was posted by Adam V. Russo on Tuesday, September 30th, 2008 at 12:58 pm and is filed under News, Welfare Benefit Plans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.