Health care affordability is placing an escalating strain on employees and dwindling satisfaction with their health plans, especially as costs are growing faster than inflation and income increases, finds a Towers Watson survey.
Seventy-two percent of employees say they are paying more for their employer-based health care benefits this year, the survey reports, as the cost for active employees are predicted to rise 8.2 percent after plan changes for an average annual cost of $10,730 in 2011. Employee satisfaction and comfort with health care benefit plans are also declining. In fact, only 64 percent say they are satisfied with their health care plans, which is a decline from 69 percent in 2007. Regarding the cost of their health plans, 45 percent are satisfied, down from 53 percent in 2007, and 26 percent say their stress levels have increased because of health care spending.
"The growing health care affordability gap is a very real problem that employers must consider as they rethink their total rewards program and approach to health care subsidies," says Ron Fontanetta, a senior health care consultant with Towers Watson. "The key to future success is a well-designed plan with creative and meaningful consumer and wellness incentives to slow cost inflation and improve employee health and productivity."
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However, this might be difficult, the survey finds. Twenty-one percent of employees have not attempted to reduce their health care costs, which is an increase from 2007 and 2008′s 14 percent. Even though nearly three in five employees take better care of themselves, this figure has dropped by 14 percent from last year. While only 11 percent ask doctors about more affordable treatment options, 7 percent search for cheaper health care providers.
Employees are also becoming progressively risk averse, which is a possible side effect of the economy, as the number of employees willing to pay more for predictable health care costs has doubled to 42 percent this past year. Thirty percent of employees are even willing to accept smaller compensation increases today if it would guarantee lower and stable health care cost increases tomorrow.
"The health care affordability crisis has become much more than an issue of managing costs: It is driving the loss of productivity," says Harlan Levine, a physician and senior health care consultant with Towers Watson. "Over time, the creation of insurance exchanges and new private coverage options spurred on by health care reform will create further challenges to employer efforts to engage employees as active consumers of health care services and participants in their own health management. As employers rethink their approach to health care, this may be the perfect opportunity to refine those strategies."
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