Because it has proved far easier to reduce health-insurance benefits or shift costs to their employees than a lot of large companies had anticipated, many firms will have no trouble implementing even more restrictions in the next two or three years, a new insurance industry survey suggests.
Moreover, if--as may be likely--federal income-tax laws are rewritten to classify health insurance as fully or partially taxable, many companies may move to cut benefits even more.
More Varied Restrictions
Even if tax-law changes don't force such reductions, workers are almost certain to see their companies inaugurate ever more varied restrictions on health-care payments.
If workers and their bosses have found this developing trend confusing, though, the new study warns that even more upheaval is to come. "Corporate health plans look set to change at least as much in the next three years as they have in the recent past," the study concludes.
In all, workers apparently stand a good chance of finding a continuing squeeze on their ability to freely choose a physician and hospital and have their health-care bills paid.
If that sounds like nothing but bad news for employees, however, the poll--conducted by the Louis Harris organization for the Equitable Life Assurance Society--found surprisingly little resistance to many restrictions on health-care benefits overall. Echoing a plethora of previous polls, the new Harris survey, which is being released today, found workers are generally indifferent to cuts, except those that actually cost them money out of pocket--like increased deductibles and co-payment plans in which employees must share out-of-pocket cash expenditures.
In all, observed Drew E. Altman, a researcher who reviewed 15 earlier surveys at the Robert Wood Johnson Foundation in Princeton, N.J., the results of the new Harris poll appear to dovetail with previous surveys that have repeatedly made it clear that while both workers and their employers agree that health-care costs are a problem, few seem ready to take drastic steps to do very much about it. And when employers speak of health costs being "under control," agreed two Equitable executives, the executives generally really mean that their own expenditures have been made more stable--not that the total bill for the nation's health care has stopped growing.
Altman was co-author of an analysis of recent measurements of public opinion about rising health-care costs. He was not involved in the new Harris survey.
Such cost increases have been widely reported for more than a decade. Many experts believe the national health-care bill will rise from $322 billion in 1982 to $690 billion by 1990 and $1.9 trillion by the turn of the century. At that rate, costs are rising by $50 billion annually and doubling every six years.
The poll, to be released today, is the third in what has become an annual series of surveys commissioned by Equitable to inquire into various aspects of American health-care public policy.
This year's Harris poll questioned 1,253 workers at firms employing 500 or more people, along with 1,250 corporate benefits officers, 200 senior executives, 200 personnel directors and 110 insurance brokers and consultants working in the health-insurance field. Among the results were these:
--Cost reduction programs have had a significant effect, with employers estimating that costs per employee this year will be 16% to 18% lower than they were three years ago. But the most successful approaches, the Harris poll found, depend on a variety of as many as 17 or 18 different approaches to cost control. No one single program works by itself.
--Though a clear majority of executives believe benefits would not drop if they became taxable, between 24% and 32% of executives in firms and 56% of insurance consultants and brokers think health-care benefits would end up being reduced in the event the tax code is changed to expose such fringes to taxation.
--Nearly three quarters of employers have, in the last three years, introduced changes in health-care coverage to cut costs. The most frequently used techniques are requirements for mandatory second opinions before certain types of surgery; increased deductibles, in which the annual amount workers pay out of pocket for medical bills goes up; pre-admission review programs to control the length of hospital stays, and the making available--now legally required for most firms--of a health-maintenance organization as an option to conventional health insurance. HMOs, as they are called, provide all medical care to a person at a set annual cost. Patients see physicians employed by the HMO and are admitted to hospitals owned by the plan or that contract with it.