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Steps Are Being Taken to Mitigate Rising Health Insurance Fees

By Jody Record, Campus Journal Editor
March 12, 2008

In 2001, a UNH employee paid $204 a year for an HMO family plan. Today, that same plan is $2,979. The cost to the university is now about $18,000.

And it’s not going down.

Predictions are that spiraling health costs will continue to send premiums upward for years to come and USNH is hoping to find ways to offset the amount passed on to its employees, says Joan Tambling, director of human resources.

A mitigation measure adopted last month by the board of trustees will create health reimbursement accounts--approximately $500 annually--beginning Jan. 1, 2009. Details of the plan are expected to be worked out within the coming months.

Additionally, the university wants to create a Web page that lists the varying cost of medical care across the state so employees can compare charges and quality and make decisions on where they want to go for service.

“This kind of information helps individuals decide whether they want to ‘shop’ at ‘Market Basket or Starbucks,”’ Tambling says. “If a test costs $500 at a provider two hours north and $3,000 locally, they might opt for the less expense test if they feel the quality of service is the same.”

Such options are more common in medical plans that provide a “tiered network” – different employee costs based on the selection of different provider costs.

“There is a disassociation,” Tambling continues. “Often people think the highest price means the best quality and that’s not always the case.”

As an incentive, the university might provide an additional motivation by paying the employee’s travel expenses, she adds, noting that eventually, if comparison shopping were to become common practice, the overall cost of service could be lowered. And that could hedge increases in premiums. However, at present these types of plans are not offered in New Hampshire because there is not enough provider competition.

The goal is to launch the Web site during the next six months. It will be aimed at supplying more consumer and wellness information. At the same time, UNH wants to provide incentives to workers who participate in USNH’s wellness offerings such as Step the System and Lifeline, as well as Harvard Pilgrim’s “Healthy Returns” program. In addition, other options that might prompt people to become more engaged in their health maintenance are being explored.

“Before, when they were paying $200 a year for health insurance, they weren’t as involved. The doctors, the hospitals were making the choices for them. The employee had no say,” Tambling says. “But when you start paying $3,000, you’re going to care.”

When the university switched from Cigna to Harvard Pilgrim in 2007, employees saw their premiums rise. But the increase was lower than it would have been had UNH stayed with Cigna, Tambling says.

A second increase, effective this year, was offset by a bump in co-payment fees and now, with UNH’s 2009 increase anticipated to be about 15 percent (actual rates won’t be negotiated until mid-July), real efforts are being made to soften the blow to employees.

“It’s not a given, it’s a projection. We’re budgeting as though it’s going to go up that much,” Tambling says of the forecast. “This is pressing on everybody. We have to do something.”

For a public employer like UNH, an attractive benefits package has been a way to recruit workers who, likely, could earn higher wages in the private sector. While the inflated cost of health care has had an impact, the university still has much to offer its workers, she says.

“People still have stability; they don’t have to worry about their company going under or being bought out. And they still have the sense that they are doing something worthwhile,” Tambling says.

And she says all this talk about health care expenses has an upside because it has created a greater emphasis on maintaining good health.

“The cost of medical insurance is so high that, merely cost shifting isn’t going to do solve the problems,” Tambling says. “If people are healthier, it will help lower the cost. That’s the biggest factor--good health—i.e., early detection of future health problems and wellness programs to reduce or avoid future health problems. These things can make a difference.”

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