Associated Industries of Massachusetts

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As Premiums Rise Slowly, More Employers Shift Some Cost To Patient

Readers, are you trying to figure out how a tiered or limited-network health insurance plan works? WBUR’s Martha Bebinger wants your story. Tell it in the Comments section or click on “Get in touch” below. She’s aiming to air more on this topic soon.

Employers across the state sit down this month for an annual meeting that many dread. It’s a briefing on how much their health insurance premiums will increase come January. WBUR’s Bob Oakes spoke with reporter Martha Bebinger about what employers can expect.

Bob Oaks: The bad news is that premiums, on average, are still rising. But the good news is that many businesses will see about the same increase or slightly lower increases than last year. What’s the range?

Martha Bebinger: Last year premiums rose 4-10 percent. This year, the increase is expected to be slightly lower, 3-6 percent. Keep in mind that these are so-called base rates. The actual rate for your company could be higher or lower, depending on the age of the employees, how much care they use and a few other factors.

(Note: Fallon Community Health Plan declined to provide their expected rate increases).

But what about this new state law that says health care costs aren’t supposed to rise any faster than growth in the state’s economy overall? With these premium increases, health care is still growing faster than most other costs. What happens?

Nothing right away. The state will eventually require hospitals, physician groups, insurers and others who deliver health care to submit plans for bringing their costs down if they exceed the state health care spending targets. But that won’t start until 2015 or 2016.

So premiums for most of us are expected to rise 3-6 percent, more or less depending on our health and the health of our colleagues. Why will we see slightly lower increases? Is Mass. figuring out how to get a handle on health care costs?

It’s not clear Bob. There are a number of things happening to slow the rise in health care premiums. Hospitals and doctors are agreeing to lower increases in the contracts they sign with insurers. And patients are seeking less care. This could be the ongoing effects of the recession, and patients putting off elective knee surgery, for example. It could also be that more and more of us have health insurance that doesn’t cover all the costs of a test or treatment. Some patients with a high deductible or higher co-pays, are putting off or just not going to the doctor or hospital to avoid those costs.

Brian Pagliaro, Senior Vice President for Sales at Tufts Health Plan.  (Courtesy of Tufts Health Plan)

Brian Pagliaro, senior vice president for sales at Tufts Health Plan. (Courtesy of Tufts Health Plan)

More employers are buying coverage with high deductibles or other types of insurance to save money. What kind of changes should patients be ready for?

High deductible plans are a common way that employers save money. These plans are cheaper because they shift some of the cost to the patient. Employers can save even more money by cutting expensive hospitals out of their coverage. This is what’s known as a limited network plan. And the fastest selling product for a few insurers is what’s known as tiered coverage. With tiered health plans, patients can go wherever they want, but they might pay $2,000 or more to deliver a baby at Brigham and Women’s Hospital for instance and nothing at, say Melrose Hospital. Continue reading