Health-plan costs for Spokane-area businesses, which softened a bit last year, will be mostly in the single-digit to low-double-digit range again this year. Representatives of health plans here warn, though, that the lower rate hikes dont mean health-benefit costs will level off in the future.


Several of the Inland Northwests largest health plans say their implementation of consumer-directed health plan products in recent years has helped keep down costs, leading to smaller premium increases. Programs that emphasize preventive care for disease and health screenings for employees also have started to take hold with employers here, serving to reduce costs further now and, its hoped, even more so in the future.


The carriers arent passing along quite as large of rate increases as before, but whether or not thats a sign of things to come is hard to say, says Mark Newbold, a consultant with Spokane-based Moloney+ONeill Benefits, which brokers plans for about 800 employer-employee groups in the Inland Northwest.


Newbold says hes seeing average health-plan rate increases of 5 percent to 15 percent this year, compared with hikes from 12 percent to 15 percent last year.


Nationwide, employers expect total health-benefit costs for active employees to rise an average of 6.1 percent this year, the same as last year and in 2005, according to the National Survey of Employer-Sponsored Health Plans, conducted by Mercer Health & Benefits LLC.


The survey also found that prescription-drug benefit cost increases for large employers rose a little more than 10 percent last year, down from 11.5 percent in 2005, due in part to employers adding multiple payment levels to encourage employees to buy generic or preferred brand-name drugs. Meanwhile, the percentage of all employers offering consumer-directed account-based health plans tripled last year, with small employers choosing that type of plan in significant numbers for the first time. Consumer-directed heath plans are health insurance arrangements designed to make consumers more active participants in decisions about their health care by taking on substantial risk for the cost of their more routine health-care expenses.


Businesses here are placing more of the cost burden for health benefits on employees by requiring employees to pay higher deductibles for health benefits, Newbold says. Employers also are offering health savings accounts and health reimbursement accounts, which allow employees to pay for health-care expenses and save for future expenses on a tax-free basis, he says.


Newbold says hes also seen more employers implement work-site health-promotion programs, which typically involve health-risk assessments and wellness programs and give employees incentives for adopting healthier habits and making better decisions about their health care. Newbold expects more employers will be making such preventive-care efforts in the future.


If we can engage employees and their families to start thinking more about healthy lifestyle choices, then in the long term we can reduce demand for health-care services, which then perhaps would curb rate increases, he says.


Thanks to better than expected claims experiences with members, heath plans have been able to add to their reserves in recent years, which has resulted in lower rate increases, he says. Perpetual issues, however, such as the aging of the population and the advent of expensive medical technology, will continue to drive up health-care costs and make it more difficult for health plans to sustain moderate hikes, he says.


At some point, push comes to shove, he says.


Meanwhile, premiums increase every year, so that even if the percentage of rate hikes stays the same, health-benefit costs still eat up more of a businesss budget every year, he says. Despite rising health-benefit costs, though, Newbold says most businesses here havent opted to terminate health benefits.


Premera Blue Cross


Premera Blue Cross, which has about 300,000 members in Eastern Washington, says its raising its rates an average of between 8 percent and 9 percent for both small and large employers. Last year, it raised its rates by similar percentages, says Mark Stuart, a Seattle-based spokesman for Premera.


Premera has been able to keep down its costs by promoting the use of generic drugs, and encouraging employers to have their employees participate in preventive health screenings, Stuart says. This spring, Premera plans to roll out a new product portfolio that aims to help smaller employers keep costs manageable by providing preventive care and online personal health assessments.


Were working on providing new products and on keeping members healthier, Stuart says. We cant control increases in more expensive technology, and we have to find ways to offset those increases.


In the past few years, Premera also has been working with physicians on quality score cards. That initiative has helped manage costs increasingly each year, which has served to keep rates in line, he says.


Group Health


Group Health Cooperative, which has more than 120,000 members in Eastern Washington, says its boosting its rates, on average, by percentages in the low single digits to even flat range for small employers and in the mid-single-digit range for large businesses. That compares with typical jumps in the upper single digits for small businesses and about 14 percent for large employers last year, says Greg Swint, Group Healths Seattle-based vice president of marketing and sales.


Fewer claims than Group Health expected last year helped hold down health-plan costs and translated into smaller premium increases this year, Swint says. Industrywide, employers have shifted to less-comprehensive benefit plans such as coinsurance or consumer-directed plans, which has reduced claims, he says. Group Health has introduced consumer-directed plans in recent years. Last fall, it also enhanced its online clinical information system so members can take health-risk assessments online and get whats called lifestyle coaching, he says.


Despite the moderation of costs the past few years, Swint says that in the coming years, he doesnt expect rates will continue to increase at the same low levels. He points to upward cost pressures caused by the aging of the population as a factor that will drive up rates in the future.


Insurance is cyclical somewhat, and I think there are indications that the cost moderation trends may be at the bottom, Swint says. I would be surprised if the increases slowed even more.


Asuris Northwest Health


Asuris Northwest Health, which has 30,000 members in Eastern Washington, says its average increases this year will be between 8 percent and 12 percent for both large and small employers. In 2006, premiums increased by similar percentages, says Charlie Fleet, a Seattle-based spokesman for Asuris.


Asuris has reduced costs and claims by encouraging members to buy generic drugs and participate in wellness programs, Fleet says. It has introduced a product through which small employers can develop their own wellness program and consult with a wellness expert provided by Asuris, he says. On its Web site, it provides information about how members health-care dollars are spent so that they can make more-informed health-care choices, he says.


We know that what drives premium increases is increases in medical services, Fleet says. Were trying to help mitigate those increases by helping people make better decisions about their health care.


Contact Emily Brandler at (509) 344-1265 or via e-mail at emilyb@spokanejournal.com.