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High-deductible health insurance is gaining significant ground in the Rochester area, the Rochester Business Alliance Inc. found in its 2013 employer survey.
Of the 203 RBA member organizations responding to the annual survey, 71 percent said they offered one or more high-deductible health insurance plans. That is up from 61 percent in 2012 and some three times the 22 percent that offered such plans in 2009.
The size of that contingent could go up again in 2014 as local employers brace themselves for double-digit rates hikes. Respondents on average said they expect to see a 12.3 percent rise in premiums next year. Thirteen percent said they would consider plans with higher deductibles to offset the increase.
High-deductible plans require subscribers to pay amounts, often ranging from $1,000 to $6,000, before coverage for most procedures or services kicks in. Such plans typically cover preventive services—annual physicals, for example—before subscribers hit deductible thresholds.
High-deductible insurance also can be coupled with health savings accounts in which subscribers and employers willing to contribute to such accounts can deposit pretax money to cover future medical expenses.
“We have seen significant growth in high-deductible health plans, especially among small employers who are very price sensitive,” said James Redmond, vice president of communications, Excellus BlueCross BlueShield, in an email.
The Blues, the area’s largest health insurer, have some 79,000 subscribers enrolled in high-deductible plans, Redmond said.
Backers of high-deductible health plans see them as a cost-control measure. By forcing patients to pay more attention financial side of their medical decisions, such plans encourage them to shop among providers and to think twice before agreeing to costly procedures, supporters contend.
“The continued focus on balancing affordability with the ability to offer competitive benefits, while holding the line on premium increases, has more employers shifting to high-deductible plans. These plans encourage employees to make more informed health care decisions, which helps maintain control over rising health care costs,” RBA president and CEO Sandra Parker said.
Critics counter patients generally find it hard, if not impossible, to shop for price and such plans do more to shift costs from employers to employees than to cut expenses.
Area physicians report that rather than shop for more affordable procedures high-deductible patients often defer or entirely avoid needed care, Monroe County Medical Society executive director Nancy Adams said.
Patients with high-deductible plans who do get care are often slow to pay or avoid paying, she added. In the Rochester area, the spread of high-deductible insurance has added to the woes of doctors and hospitals.
Until consumers are billed, the price of medical procedures can be opaque to them.
Area hospitals and health systems, which consider the cost of procedures to be proprietary information, are loath to publicize them, Finger Lakes Health System associate executive director Thomas Mahoney M.D. told the Rochester Business Journal in a recent interview.
Some large, self-funded employers do successfully shop for more affordable care. Wal-Mart Stores Inc., for example, pays travel expenses and even fully covers the cost of procedures for employees it insures who are willing to travel to distant cities for cheaper care, a recent AP article reported.
Adams said she is not aware of local employers or insurance carriers with similar programs, however.
The small employers most likely to turn to high-deductible plans locally, or individual patients, could find quality but distant affordable care hard to research, she said. And any that did locate such care could run up against their insurance carrier’s refusal to credit fees paid to an out-of-network provider toward deductible amounts.
An upside for area workers covered by employer-sponsored insurance: Respondents to the RBA survey on average covered 74 percent of premiums for single-person plans, 67 percent of two-person plans, 69 percent of family plans without spousal coverage, and 66 percent of family-plan premiums.
The percentage of respondents covering the full cost of premiums fell three percentage points, dropping to 15 percent from 18 percent a year ago. The percentage of respondents offering coverage to part-time workers rose, to 68 percent from 65 percent last year.
The cost of respondents’ premiums as a percentage of payroll was up, rising to 10.3 percent this year from 9.2 percent last year, the survey found.
Organizations participating in the RBA survey employ 93,329 full-time workers.
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