Saturday, September 27, 2008

Health Insurance Costs Rise - And You Are Paying

The cost of health insurance continues to rise and premiums far exceed the rate of wage increases and inflation in the United States. Insurance premiums are going up ten times faster than people’s incomes and the average dollar amount employees must pay per year for family health coverage increased by 30% from 2001-2005.

Federal employees premiums will climb an additional 13% next year for enrollees in the Blue Cross and Blue Shield Plans. The Office of Personnel Management (OPM) negotiates on behalf of the nations largest group of employees, more than eight million federal health workers, retirees and dependents. Despite this bargaining clout, they were unable to keep cost increases at a reasonable rate. On average, enrollees with family coverage will pay about 30% of the plan’s total cost with the government picking up the remaining 70%.

Blue Cross and Blue Shield, which covers the bulk of Federal employees, blames the cost increases on drug costs and the fact that few patients have switched to cheaper generic medications. In 2009, the government wide service benefit plan will waive the first four copays for members who use mail order generic drugs in an attempt to reward the switch. Members will continue to save 5% on copays for generic drugs they buy at pharmacies.

Other reasons cited for the soaring cost of insurance was “higher utilization of health care services, technology and medical inflation”, according to Jena Estes, vice president of federal employment programs for Blue Cross Blue Shield. Colleen Kelly, president of the National Treasury Employees Union, said, “It’s very discouraging to see average increases of this magnitude…particularly given the bargaining power OPM should be able to exercise as manager of the nations largest group plan.”

Nancy Kichack, OPM’s associate director for strategic human resources policy, reported that the increasing premium costs reflect the rising costs of health care, though she stressed that Federal premium increases are less than increases for most major health care programs in the private sector.

Since the government sector is covered by our taxes and the private sector is covered by our wages, the American people are paying either way. There is no relief for the American people when health costs spiral upward and the bargaining advantage of that insurance giant, “The Blues”, has far exceeded the power of the government to negotiate lower rates for its employees.


Healthnut said...

Now that Fannie and Freddie are under the "wings" of the government, does this mean we will be covering their share, too?

Marica Pook, MD said...

Health care and the American public are suffering all around. But the question is: what is the fix? Do we go to a socialized care system, do we try to "educate" patients to utilize health care LESS (see the generic v. trade name drug explanation above) or do we limp along as we are? Are we as physicians savvy enough about medical economics to take the helm? I hope that we as physicians can make ourselves heard and we can be active in creating health care for all.