Looking ahead: next year’s health plans

Marketplace Staff Nov 20, 2009

Looking ahead: next year’s health plans

Marketplace Staff Nov 20, 2009


Tess Vigeland: Tis the season to be figuring out your open enrollment. That would be why you’re thinking things like, “I’ve never fallen down the stairs and broken my leg, but it could happen.” We’re all supposed to be re-evaluating our health insurance and other benefits.

Paul Fronstin is with the Employee Benefit Research Institute and he’s here to remind us that it is important to pay attention in those long HR sessions!

Welcome to the program.

Paul Fronstin: Thank you.

Vigeland: We’ve been getting questions from people on how the health care legislation moving through Congress affects open enrollment. The short answer I suppose is, it doesn’t, right?

Fronstin: Well that’s right. The health form moving through Congress, 1. hasn’t been passed yet and it likely won’t pass the full Congress until next year. But even if it had passed full Congress, the provisions in the bill don’t take effect, for the most part, until 2013.

Vigeland: So don’t be putting off anything or making any decisions based on the fact that we may have health care reform.

Fronstin: It’s too early to make any kind of decision based upon what health reform might look like.

Vigeland: All right. But there is a lot of talk about health care policy these days, so I would think it would make sense that folks are paying more attention to how much their health care costs and what they spend. What are we likely to see as we look at next year’s employer health plans?

Fronstin: What we’re likely to see is a continuation of the trends we’ve been seeing for the past few years. That doesn’t mean that each person that’s listening to this program has experienced this, but it may in fact mean that the trends we’re seeing will be catching up to people that haven’t experienced them, such as higher deductibles, higher co-payments, the return of co-insurance for some people. Employers are generally asking workers to contribute more towards the cost of health care services when you need them.

Vigeland: When we look at those costs going up, if it used to be 50-50, is it now 52-48 when you’re looking at cost sharing?

Fronstin: We actually know from national data as of about two or three years ago, we were at a record low, in terms of the percentage that people pay out of their own pocket for health care services, as a percentage of the total health care bill in the U.S.

Vigeland: I think a lot of folks would find that very surprising.

Fronstin: That’s right. And they’re surprised by that, because they look at what they’re paying, but they don’t take into account what their insurer might be paying on their behalf for the services that they get. So what’s happening is the pie, if you will, is getting bigger and bigger and the slice that people pay out of their own pocket is actually at a historical low.

Vigeland: So is most of that cost then being picked up by the insurance company or the employer?

Fronstin: That’s a great question and insurance companies, and employers and economists all answer it differently. Insurance companies would say they’re paying it. Economists would say that workers are paying it by not getting wage increases that they otherwise would get. And employers would say they’re paying it.

Vigeland: Now the standard advice is to go to the open enrollment fair, listen to the presentations on the benefits to get yourself educated about them, but what if — and this has happened to me — you leave those sessions even more confused than when you went in?

Fronstin: Well at that point, if you don’t quite understand the information that was presented, you’re likely to walk away with a package of materials or a link to a Web site with this information. Take some time to get to know it. It may mean that the plan you’re on is the best plan for you. But you need to do some homework. You’re not going to get all the answers in that one open enrollment meeting

Vigeland: Now you know, supposedly we’re coming out this recession, but the job market is still very tight. How do you think the economy might be affecting the choices that people are making about their benefits? Do we tend to want more insurance or are we tempted to cut costs, because we’re in a bad economic time?

Fronstin: Well the answer is yes. You see all of the above. You see people going to less expensive insurance in order to save a few dollars. And you also see people using more health care, because of a fear that they may lose their job in this economy and as a result, lose their insurance. So they want to get their health care spending in now, when they have good health insurance coverage.

Vigeland: Paul Fronstin is a senior research associate with the Employee Benefit Research Institute. Thanks so much for your help today.

Fronstin: My pleasure.

Vigeland: For more tips on open enrollment, visit our Web site. It’s Marketplace.org.

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