Health-plan costs for businesses here will rise mostly from the upper single-digits to upper-teens percentage range, which is mostly up from the hikes seen last year, say representatives of health plans offered here. They say theyll continue to look to their members to become more active in managing their own health care to keep costs down.


Nationally, a rise of about 5.7 percent is expected this year, less than the 6.1 percent average increase in 2007, according to the National Survey of Employer-Sponsored Health Plans, conducted by Mercer Health & Benefits LLC.


David Smith, an underwriting consultant at Spokane-based Moloney+ONeill Benefits, which brokers plans for about 800 employer-employee groups in the Inland Northwest, says the average increase for mid-large groups is in the 10 percent to 16 percent range. Such groups include 50 to 100 employees.


Smith says that for small groups, the best way to measure changing costs is to look at the plans cost trends, which he says are up 10 percent to 15 percent. A trend represents the basic increase a company would experience with all things being equal. Trend values are calculated by health plans based on various factors, such as new technologies, new drugs, inflation, and increases in the number of Medicaid or Medicare clients, both of which drive up the cost of private-pay health care, he says.


The amount the premium is going up for a large group will be based on whats happening with their own claims, Smith says, while small groups premiums are more dependent on the trends the carrier factors in. He says those smaller groups frequently can keep costs down only by altering their benefits.


One pattern hes noting this year is that employers are increasing employee deductibles to keep costs down, but also are easing employees costs with health-reimbursement accounts that start to pay after a member meets a portion of the deductible. Smith says this creates a combination of insurance and self-funding that employers hope will save them money and will help employees cope with health-care expenses.


The Mercer study says such cost shifting is one reason health-plan premium increases remained comparatively low last year, while deductibles among plans offered by large employers rose about 11 percent. Nationally, deductibles in plans offered by small employers rose less, about 2 percent.


That consumer-directed health-plan participation is on the rise might also be helping to keep costs down, the Mercer study suggests. Such plans are designed to make consumers more active participants in their health care because they take on substantial responsibility for the cost of routine health-care expenses.


Smith says he thinks, however, that people in the insurance industry are beginning to question whether consumer-driven planswhich often feature a higher deductible, a health-reimbursement account or health savings account, and a wellness pieceare really saving money.


I think people were expecting consumer-driven (care) to be the savior, but its not looking like thats the case. People are not sure the return on the investment is there, Smith says.


The Mercer study indicates that plans with higher deductibles are still growing nationally, however, with 11 percent of employers likely to offer such plans in 2008, compared with 7 percent in 2007.


Smith cautions that national surveys such as the Mercer survey are more reflective of Seattle, where plan offerings are richer, than of Eastern Washington.


Premera Blue Cross


Among the clients of Premera Blue Cross, which has about 1.3 million members in Washington, including 247,000 in Eastern Washington, employers with fewer than 200 employees can expect premium increases in the mid- to upper-teens, says Mark Stuart, a Seattle-based spokesman for Premera. Last year, the insurer increased its rates 8 percent to 9 percent for both small and large groups.


Stuart says Premera has been implementing lean principles into its administrative functions, including claims processing, in its efforts to keep costs down. Additionally, he says, it has worked with clinics and providers to create a quality score card to establish cost-efficient standards of care.


Stuart says health insurers cost increases are a result of the aging of the population, combined with the availability of more advanced care and increasingly less healthy lifestyles that people lead. He says in terms of patient care, Premera is focusing on disease-management efforts and trying to make sure people get into the right care at the right time.


Group Health Cooperative


Greg Swint, Seattle-based executive vice president of Group Health Cooperatives health-plan division, estimates that Group Healths small-employer plans are increasing their premiums in a general range of 10 percent to 13 percent this year, but says the increases can vary a lot for those groups. Mid-large group plans, for employers that have 50 to 100 employees, as at Moloney+ONeill, will increase in a range of about 8 percent to 11 percent, he says. This compares to increases last year that were in the low single digits to even flat range for small employers and in the mid-single-digit range for mid-large businesses, Swint says.


Swint says Group Health, which has more than 578,000 members in Washington, including 123,000 in Eastern Washington, is focusing on three areas to help keep costs down. Improving the companys own administrative efficiency is a priority, he says. Group Health also is working to make sure physicians and providers use standard guidelines and approaches for procedures, to reduce variations in practice that can affect cost, he says. Finally, Swint says, the organization is focusing on increasing member use of online technology to keep patients engaged in managing their own health care, such as online health profiles used to update patients medical records.


In 2007, increases in Group Healths premiums were probably a little more moderate, both in the small-group and mid-large group-category, after being higher in 2006, he says.


We would like to keep them trending down, but its hard to do that, Swint says.


Asuris Northwest Health


Anna Scarlett, a spokeswoman for Asuris Northwest Health, which has about 51,000 members in Eastern Washington, says the health-care trends that underlie changes in premiums for that companys products are ranging from single digits to mid- to low-teens for both small and mid-large group plans. Last year it reported average premium increases of between 8 percent and 12 percent for both small and mid-large groups.


Scarlett says no specific factors are driving rate increases more than any other. She says the companys premiums are a direct reflection of health-care costs.


The company tests some of its new programs internally with its own employees, Scarlett says. By instituting wellness tools such as telephone-based health coaching, the company reduced obesity-related claims and smoking among Regents own employees, she says. This year, Asuris is adding such tools to most of its health-care lines, and they will be a big part of Asuris product offerings for smaller employers, Scarlett says.


Asuris also is encouraging members to take a more active role in managing their own care by using online tools Asuris offers to enable them to track how much theyre spending on health care and to share feedback about their health-care providers with other employees.


Contact Jeanne Gustafson at (509) 344-1264 or via e-mail at jeanneg@spokanejournal.com.