Breathtaking changes that hold the promise of controlling the cost of health insurance in Massachusetts have not yet reached most employers and their workers.
The 2012 AIM Benefits Report provides a compelling snapshot of the time lag that always falls between revolutionary changes and their implementation throughout an economy. Benjamin Disraeli had it right when he said that “great revolutions, whatever may be their causes, are not lightly commenced, and are not concluded with precipitation.”
Health care and health insurance costs remain the dominant benefits challenge for the 236 Massachusetts employers who participated in the benefits survey. A staggering 98 percent named providing health insurance to their workers as the primary concern of their companies.
But despite the development of cost-reducing health insurance plans that encourage patients to seek care in reasonably priced settings, and the development of payment structures that reward doctors for good outcomes rather than tests, most employers continued to use traditional cost shifting to address their health premium issues in 2011.
The report indicates that only 2 percent of employers offer a tiered network plan, which provides workers low co-pays for treatment in community settings, and 1 percent of companies offered a limited network plan that reduces costs by requiring patients to seek care in within a defined group of providers.
Thirty-eight percent of employers, meanwhile, increased co-pays for employees. Forty-one percent boosted deductibles and 37 percent increases co-payments for visits to the hospital emergency room.
Analysts expect those numbers to change drastically this year as employers get their first taste of innovative new insurance plans:
- Tiered network plans, with premiums 12 percent below those for an average HMO, now make up 15 percent of the Massachusetts market.
- More than 1.2 million Bay State residents are now covered by cost-reducing health plans that pay doctors for outcomes instead of procedures and reward consumers for seeking care in high-quality community facilities.
- Steward Health Care System received approval in December to market a limited-network health plan that the company says will cost 15-30 percent less than a typical health maintenance organization.
- Small employers in Massachusetts face average premium increases of 1.8 percent in 2012, down from 16.3 percent two years ago.
The changes in the health care market can’t come soon enough for frustrated employers who realize that cost-shifting ultimately erodes their ability to attract and retain key employees. Lower health premiums are just the prescription for increased economic growth and job creation.