Last week the Teamsters union negotiated the highest health increase ever in the freight industry. While health costs are increasing at an unprecedented rate and employers are cutting benefits, raising the cost of employee participation, or both, the major trucking companies agreed to health and pension fund increases of $3.10 per hour and a continuation of the no-co-pay policy that is nearly non-existent among the rest of corporate America. By the time this contract expires in five years, freight carriers may be the only companies left providing such extensive health benefits.
Health care costs are expected to increase 15% in 2003, after a 13% increase in 2002 and an 11% increase in 2001. Companies that have reached a breaking point in terms of employer-provided benefits argue that either the type of insurance coverage or the types of covered services must change.
Anticipated future trends include higher charges for hospital care, increased prescription drug costs, continued nursing shortages, and more doctors refusing to perform surgeries due to skyrocketing medical malpractice insurance costs.
In addition to increasing the employee share of health insurance and increasing employee co-pay amounts, companies are seeking more creative means of dealing with the crisis while still offering benefits to employees. Options include more self-insurance plans, medical savings accounts, and previously unrelated groups banding together to cut the cost of group insurance plans.
Forbes Magazine reports that some companies are reluctant to hire new employees because of the cost of benefits. Temporary employees offer an alternative to hiring full time employees who receive a full benefit package.
Experts foresee a trend toward offering variable health insurance coverage based on how well plan participants take care of themselves. A recent story in The Tampa Tribune reported on the possibility of insurers, doctors, and hospitals "offering additionally discounted rates to those who can prove they have changed their behavior to exercise regularly, give up smoking and excessive drinking and avoid automobile accidents. Obesity, tobacco, alcohol and speed are among the leading causes of increased health care costs."