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Unhealthy Situation

Health care premiums are rising sharply again, as too much cost-cutting leads to employees going without care for chronic conditions.

By Anne Field | Updated on August 01, 2008

Health-care premiums for employers are rising again — and the culprit seems to be excessive cost-cutting. Those are the findings of a recent study by Hewitt Associates of 350 large employers. According to the Lincolnshire, Ill.-based human resources consulting group, the rate of increase in premiums paid by employers for 2008 is likely to rise by 8.7%. That’s compared to a slow but steady drop in the rate of increase from 2005 at 9.2% to 2007 at 5.3%.

The major malefactor: too much shifting of costs onto employees, according to Jim Winkler, national practice leader in health management consulting. Specifically, over the past five years or so, more employers have made a practice of increasing employees’ share of deductibles and out-of-pocket expenses.

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