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Life Health > Health Insurance

Health Coverage Deluge? Not Yet

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NU Online News Service, May 10, 5:15 p.m. – Brad Benton is the latest health care consultant who is predicting the U.S. health care system will remain reasonably steady at least until 2004.

Commercial health coverage costs have been increasing at double-digit rates since the mid-1990s, and surveys are suggesting that large employers are expecting more big increases in 2003.

The job market may not have fallen off a cliff, but it has, at the very least, tripped over a curb.

But Benton, a partner in the health care and public sector practice in the Atlanta office of KPMG L.L.P., says the forces propping up the current, employer-sponsored system are just too strong for the system to crumble in 2003, let alone this year.

“Employers are committed to the idea of offering health care benefits,” Benton says.

For now, the cost increases still don’t amount to a “DEFCON 1 kind of event,” Benton insists.

Benton sees employers changing plan designs and sharing more costs with employees, not moving to drop health coverage altogether.

Other consultants and analysts have been coming out with similar forecasts. Nancy Weaver, for example, a securities analyst with Stephens Inc., Little Rock, Ark., issued a health care forecast earlier this week suggesting that the gridlock in Washington will make major changes in the U.S. commercial health finance system all but impossible for the next two or three years.

Benton does see the defined contribution health plan movement picking up momentum.

The typical defined contribution health plan combines high-deductible, catastrophic health insurance with employer-funded personal health care accounts. Employers usually contribute a set amount per employee.

So far, one of the biggest obstacles seems to be federal laws and regulations that keep employers from giving employees the cash in the personal care accounts outright, Benton says.

Defined-contribution organizers have found ways to develop point systems and other systems that enable employees to build up account purchasing power over the course of several years. But, except in rare instances, experts say, organizers have not found good ways to put the cash in the hands of the employees without leading to big tax headaches.


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