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2013 Study Results: Iowa Employers Report 9% Increase in Health Premiums

September 12, 2013 By

David P. Lind BenchmarkToday, we issued our Press Release on the results from our 15th annual Iowa Employer Benefits Study©. As you might imagine, there is a wealth of data coming from this year’s survey, but as always, one of the most newsworthy finding is the headline number – 9 percent.

 

Average Health Insurance Rate Increases in Iowa 

It is important to distinguish how this increase is determined each year. The 9 percent increase is an average that factors in employers receiving no rate change, an increase or decrease in their premiums. This number represents the average increase in premiums employers received PRIOR to making design changes to their medical insurance plans – such as increasing cost-sharing arrangements with employees. After altering the plan design, the net increase over the past year was a modest three percent for single premiums and under five percent for family premiums.

How does this net increase compare to the national average? According to the 2013 Employer Health Benefits Survey conducted through the Kaiser Family Foundation/Health Research & Educational Trust (HRET), this average is quite similar to the five percent increase on single coverage and four percent on family coverage.

We have been surveying employers since 1999 (2001 was the first year we began asking questions on premium adjustments). With this relatively “tame” increase (compared to prior double-digit increases between 2001 and 2010), Iowa employers reported making the following changes during the past 12 months:

  • Passed some or all of the increased costs to the employees (57 percent)
  • Absorbed the entire cost increase (33 percent)
  • Increased deductibles (20 percent)
  • Raised out-of-pocket maximums (10 percent)
  • Increased office visit co-payments (8 percent)
  • Increased prescription drug co-payments (7 percent)
  • Changed insurance companies (8 percent)
  • Reduced pay raises or bonuses (6 percent)
  • Offered Consumer-Driven Health Plans (5 percent)
  • Began wellness program initiatives (4 percent)

Since 1999, the annual Iowa single premium has increased by 171 percent, while the family premium increased by 158 percent. By comparison nationally, over that same time period, Kaiser reported increases of 168% and 182%, respectively.

Over the course of 15 years, employee contributions have increased by 117 percent for single coverage and 121 percent for family coverage. These numbers are more staggering when compared to the average weekly wage (for all industries), which increased by only 37.5 percent between 2001 and 2012 (Source: Iowa Workforce Development).

The overall percentage of Iowa employers offering health coverage dropped to 77 percent from 81 percent in the 2012 study. This four percent drop is considered statistically meaningful. A greater percentage of smaller employers with fewer than 20 employees reported not offering health coverage in the 2013 survey. This number will require additional scrutiny in future studies.

Iowa Employers Offering Health Insurance

Employer Attitudes on Health Reform
A number of questions relating to the Affordable Care Act (ACA) were directed to employers during this year’s survey. One key finding is that less than two percent of Iowa employers with over 50 employees indicated they would discontinue offering health coverage and, instead, incur the $2,000 penalty per employee. It must be noted that employers responded to these questions PRIOR to learning the employer mandate was delayed until 2015. This response from employers, however, does provide a glimpse into 2015 when the mandate takes hold.

When asked about the likelihood of discontinuing health coverage in the next three years due to health reform requirements, only 2.6 percent indicated they would not offer coverage (all coming from smaller employers). No employer with at least 250 employees reported they would drop coverage.

Plan Design Attitudes
Iowa employers were also asked a series of questions about reducing health care costs now and during the next five years. Over 42 percent of employers currently encourage the use of high-quality hospitals and physicians. This is accomplished either through their health insurance providers or by lowering employee cost-sharing to provide incentives to use designated health providers. Another 11 percent plan to include this approach within the next five years.

Over 11 percent of employers currently reward employees with reduced premiums or lower cost-sharing for achieving certain health outcomes, such as improved Body Mass Index (BMI) or lower cholesterol, while 19 percent plan to encourage this approach during the next five years.

The complete 2013 Iowa Employer Benefits Study© will be available for purchase and download in the near future.

The above information is just a small fraction of our survey results. To learn more, we invite you to subscribe to our blog.

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Taming the ‘Wild West’

November 21, 2012 By

I recently devoured a fascinating book that is very disturbing and yet, potentially uplifting. I sound a bit schizophrenic, don’t you think?

Allow me to explain.

The book, “Unaccountable“, is written by Dr. Martin Makary, a highly-accomplished laparoscopic surgeon at the Johns Hopkins Hospital and an international expert on patient safety. Makary is an advocate for transparency in medicine and developed The Surgical Safety Checklist which was popularized in the Atul Gawande’s best-selling book, The Checklist Manifesto. His accomplishments are extremely impressive…and so is his book, published in September of this year.

The book is full of disturbing scenarios of unintended consequences patients face while interfacing with a “fragmented health care system littered with perverse incentives.” As Makary states, our healthcare ‘system’ is “an industry that does not abide by the same principles of accountability for performance that govern other industries.” One statistic says it all to me: Medical mistakes kill enough people each week to fill four jumbo jets – yet we do not read about this on the front pages of our newspapers. FYI – there are over 400 seats in one standard Boeing 747 jumbo.

Quite disturbing.

Makary shares intimate and revealing insider information – more meaningful due to the credibility of the messenger: “Patients are encouraged to think that the health care system is a well-oiled machine, competent and all-wise. It’s not. It’s actually more like the Wild West.” The Wild West?

An inexcusable by-product that comes from our perverse health care ‘system’ was published in the prestigious New England Journal of Medicine in 2010:

“As many as 25 percent of all patients are harmed by medical mistakes. What’s even less known to the public is that over the past ten years, error rates have not come down, despite numerous efforts to make medical care safer. Medical mistakes are but one costly example of how health care’s closed-door culture feeds complacency about its problems.” As Makary points out, if medical errors were a disease, they would be the sixth leading cause of death in the U.S. – just behind accidents.

No wonder our health insurance rates continue to consistently outpace inflation – we pay for medical mistakes that are extremely expensive…both in dollars and, most unfortunately, in lives. Reforming health care should really be about reforming the ACCOUNTABILITY of how health care is delivered in this country.

Now, for the uplifting portion of his book – Makary proposes that our healthcare ‘system’ can be fixed by implementing common sense solutions to empower patients with useful information when seeking appropriate medical care. Makary is passionate about the need for hospitals to make their outcomes available on the Internet so that patients can become informed and engaged “consumers.”

Hospital reporting measures would include the following:

  1. Bouncebacks: Documenting the percentage of hospitalized patients who are re-admitted to a hospital within 90 days.
  2. Complication Rates: Documenting any unexpected, adverse event that develops during or after a medical treatment or procedure.
  3. Never-Events: Documenting things that should never happen in a hospital.
  4. Safety-Culture Scores: Survey hospital workers who believe (or don’t believe) they work in safe hospitals. This reporting tool can be critical to the general public.
  5. Hospital Volumes: Number of patients with a particular type of medical condition who are treated and the frequency of each type of surgery performed annually by each hospital.
  6. Transparent Records, Open Notes, and Video Recording: Encourage hospitals to implement initiatives that allow patients to have access to written and video records following surgical procedures.

My great hope is that healthcare in this country will transition from the Wild West to the New Frontier that we all deserve – having safe, affordable and full accountability that will provide for quality and efficiency.

It cannot happen fast enough – for all of us.

To learn more, we invite you to subscribe to our blog.

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Scary 13 Year Trend

August 15, 2012 By

Iowa Employer Benefits StudyI’ll admit it. I’m somewhat of a self-described GEEK! I love numbers, statistics, trends…I love stories!

That is why I enjoy research. Trends that germinate from research can ultimately tell stories. Iowa has a story…unfortunately, a very common (and scary) story.

One comparison slide that I put together provides a very interesting ‘story’ about what is happening to health insurance rates both in Iowa and nationally. This slide (see below) demonstrates that Iowa is not immune from the disturbing trend that the Kaiser/HRET Survey has revealed for the past thirteen years (1999 through 2011) in the U.S. When I superimpose our Iowa study results with the Kaiser results, the trends are eerily similar. OK, downright scary!

David P. Lind Benchmark

The Kaiser single coverage annual premium (light green bar), has increased by 147 percent from 1999 to 2011. By comparison, the Iowa single coverage annual premium (DPLB Single) increased by 145 percent during that same period. In 2011, the national single premium is about 7.5 percent higher than Iowa’s average single premium. By contrast, the average national family premium is 13.4 percent higher than Iowa’s family premium. If anything, Iowa is fortunate to have lower than average insurance premiums when compared to the rest of the country.

But the trend we see in Iowa employer premiums is alarming. We may have lower premiums than many other states, but our premium growth rate appears to be very comparable to the national average – which is not a flattering compliment to Iowa. It is important for Iowa employers to compete both nationally and globally by having quality health care at affordable costs. Clearly, the trends we see on this particular slide are devastating to employers within and outside of Iowa.

I look forward to continuing this ‘story’ to see how health reform will affect these trends. What is your guess? 

 

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