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Higher health premiums await workers, poll says

By Jeffrey Young
Bloomberg News / August 19, 2010

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WASHINGTON — Workers will pay more for health care next year as US companies prepare for provisions of the federal overhaul signed into law by President Obama, according to a survey released yesterday.

About 63 percent of businesses plan to make employees pay a higher percentage of their premium costs in 2011, said the National Business Group on Health, which surveyed 72 companies that employ more than 3.7 million people. The survey showed 46 percent plan to raise the maximum level of out-of-pocket costs workers must bear.

The companies expect the costs of health care to rise an average of 8.9 percent next year. The legislation Obama signed in March will contribute an estimated 1 percentage point to the higher expense, said Helen Darling, the business group’s president.

Employee-paid portions may see small increases, she said.

Employers may be using the health care law as cover for changes in benefits that they had already planned, said Igor Volsky, a researcher at the Center for American Progress, which supported the overhaul.

The companies, each of which has at least 5,000 workers, expect health-benefit costs to rise 7 percent this year, half a percentage point higher than employers estimated in a separate survey released by the National Business Group on Health and the consulting firm Towers Watson & Co. in March.

The health care law was designed to rein in costs while enabling employers to adjust their benefits, said Jessica Santillo, a Department of Health and Human Services spokeswoman.

About 57 percent of the employers in the study said their workers paid a higher portion of their premiums this year.

The companies said they plan to offer more consumer-directed benefits, such as insurance with high deductibles paired with tax-free health savings accounts. Twenty percent will replace their current offerings with such plans in 2011, according to the survey, compared with 10 percent who did so this year.