Employers have seen healthcare costs tick up every year. Nationwide small businesses and large companies alike have had to face the question: What is affordable and will it be enough? Employers are responding to an increase in healthcare costs by offering low-cost, consumer-directed health plans, a shift that has kept prices from increasing.
Despite Utah having one of the lowest health insurance rates in the country, rising costs are not new.
According to a survey conducted by global consulting firm Mercer, national healthcare costs will increase by 4.1 percent, more than $10,000 per employee, in 2013. And while the rate insurance prices are rising is relatively low in comparison to past years, Mercer attributes that fact to more employers opting for plans with fewer benefits, more high deductible rate plans.
"We've seen this trend, the increasing prices, over the last several years," said Park City Medical Center Administrator Si Hutt. "Insurance companies are putting more of the cost burden on beneficiaries, making employers more price sensitive in healthcare decisions. I see that continuing."
The hospital is also experiencing a higher number of patients using high deductible health insurance plans, Hutt said. A high deductible health plan requires more out-of-pocket money from insured individuals, and once that deductible has been reached, the remaining healthcare costs are covered under the plan. In return for a lower premium, people using this type of plan may be responsible for most healthcare costs in a year.
At the Summit County level, co-pays are rising for employees using local hospitals and the county will be including a high deductible plan. Healthcare costs for the county have increased more than 13 percent from the year before after the county implemented a self-financed plan.
"This has decreased the potential increase in healthcare premiums," said Brian Bellamy, the Personnel Director for Summit County. "Costs were going to go up by $135, but we were able to decrease that number to $70, defraying the costs of the premiums by having employees pay more out of pocket for doctors. We've shifted the cost onto employees who use healthcare benefits."
It was a decision employees helped choose, he said.
"Rural hospitals charge more," Bellamy added, "and insurances are paying less. What it comes down to is people hit their deductibles faster. Of course employees can still go to the Park City Medical Center or the Heber Valley Medical Center. They can go wherever they want. What we tried to do was maintain the integrity of health plan. The people who use the plan a lot should bear the cost of that."
Other large employers in the county are also seeing prices rise, but with much smaller increases.
The largest employer in Summit County, Deer Valley Resort has seen increases in health insurance plans, but has tried to absorb the changes.
"The rates go up a little bit each year, but we have not passed those costs on to our staff," said Deer Valley Human Resource Director Kim Mayhew. "That's the cost of doing business."
Stein Eriksen Lodge Human Resources Director Michelle MacDonald said the property has also managed to keep health costs low.
"It is partially due to the fact that we have a healthy workforce, a lot of younger employees," MacDonald said, "that we've been able to keep costs down. I'm not sure that is the case for all employers."
MacDonald said health plans will need to be re-evaluated in 2014, when significant portions of the Obamacare legislation will go into effect.
"The reason (health insurance companies) are raising the out-of-pocket expense is to create more consumerism," Hutt said. "When you are shopping with someone else's money, you may not be as frugal if that money was your own ... I don't know if this results in wiser financial decisions or just creates barrier for people to access healthcare."