Workers picking up more health costs

Employers expect to keep cost increases for medical coverage to a relatively modest 6.4 percent next year, but only by continuing to shift more of the expense to employees.

This year, employers saw health-benefit costs rise 6.3 percent after increasing deductibles, co-payments and workers' portion of premiums, according to an annual survey released this morning by Mercer, a firm that advises companies on medical insurance.

For example, the median deductible for PPO health plans jumped to $1,000 this year, up from $500 in 2007, according to the survey of 2,900 employers. That means workers paid more out of pocket before insurance coverage kicked in. PPOs are the most popular type of health plan, covering 69 percent of employees.

"More and more, people are going to pay when they access health-care services," said Steve Graybill, a principal with Mercer in Charlotte. "We have unprecedented times in our economy, and employers are trying to manage these cost increases."

Still, for the most part, employees saw "reasonable increases and moderate design changes," during this fall's open enrollment season, Graybill said.

But projected costs for 2009 could start to climb more quickly if a recession drags on, forcing employers to make more severe changes. When workers get laid off, or are worried about losing their jobs, they tend to use more services in case employer-sponsored benefits disappear, Graybill said.

The Mercer survey follows others that predict employers and employees will continue to see costs rise for medical coverage. A recent Kaiser Family Foundation survey also predicted that workers will see higher deductibles, co-payments and other fees next year.