More workers opt out of insurance

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BY NANCY HICKS / Lincoln Journal Star

As health insurance premiums rise across the country, fewer workers are purchasing the insurance plans offered at their jobs. Nebraska workers are turning down employer-sponsored health insurance plans in greater numbers than in other states, according to a national study.

In 2003, about 76 percent of Nebraska workers eligible for employer-based health insurance purchased the insurance, according to the Robert Wood Johnson Foundation.

Nebraska saw a big drop from 1998 to 2003 —11.5 percent — in the number of employees enrolled in employer coverage, said Lynn Bluwett, director of the University of Minnesota center that produced the study.

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“This is a significant decline and one of the largest,” she said.

In Nebraska, insurance premiums are in the middle range compared to other states. The premiums for a single person rose from an average $215 a month in 1998 to around $292 a month five years later. 

That’s a 36 percent jump. It’s  an increase of almost $1,000 a year  for a single person and would be more than $2,000 for family coverage.

Employers and workers generally share the cost of the premium and in 2003 the average Nebraska worker paid 25 percent of the premium cost. The employer paid the rest.

The study findings don’t surprise Julie Panko, human resource director at Lincoln’s Linweld Inc.

Every year, the company struggles with the rising cost of health insurance.

“The employer has only so many dollars to spend on benefits. So the more you spend on one benefit the less you have to spend on the others,” she said. 

Linweld has modified benefits — increasing deductibles and co-pays — to keep a lid on premiums.

Last year, for example, the company was looking at a 15 percent increase in premiums. Panko said it tinkered with deductibles and co-insurance and was able to knock down the premium increase to 10 percent.

The employees get grumpy about the rising health care costs. 

“We don’t feel good about it either. But that’s the reality of the situation, unfortunately,” she said. 

Duteau Chevrolet Subaru has increased its deductible — from $250 to a $1,000 per person standard — over the past few years, trying to control premiums, said Lynn Sunderman, vice president. Employees can pay more for a lower deductible, less for a higher deductible.

In fact more young, single employees are purchasing insurance, since they can get a $2,500 deductible plan for about $50 a month, he said.

Linweld and some other local companies are also experimenting with wellness programs attempting to reduce health care costs. Some companies have established age ratings, so older people pay higher premiums than young workers. 

The Linweld and Duteau  experience with trying to tame the rising cost of health insurance is a universal experience.

And the trend — higher costs,  decreasing participation — probably won’t change for a few years, according to Keith Mueller, director of the Nebraska Center for Rural Health Research at the University of Nebraska Medical Center.

These changes at the edges  have a marginal effect, but they are not big enough to reverse the trend,  he said.

And he believes Americans won’t try anything dramatic “until we all agree the incremental changes can’t get us to the objective, which is universal coverage,” he said.

A 2004 Nebraska health insurance-related study had similar results to the national study. Cost was the major reason Nebraskans didn’t buy health insurance.

“The most frequent reply was ‘I can’t afford it,’”  said Mueller, whose organization helped conduct that study. 

And many people didn’t like the trade-off that employers are making to keep premiums from skyrocketing — increasing co-pays for services or higher deductibles — for lower premiums, he said.

“Why should I pay this premium if I have such a high deductible,” was their answer, he said.

Rising premiums raise ethical and practical problems.

People who can’t afford to go to the doctor are “literally sitting in pain. They are not keeping chronic illnesses under control,” said Jennifer Carter, staff attorney for Nebraska Appleseed Center.   

“This is a real hindrance to self- sufficiency.  It makes it hard for people to work, “ she said.

 And when someone is unable to get preventive care, they can end up in the hospital with a more serious illness. 

These catastrophic costs, absorbed by the hospital,  cost all of us in the end, she said. 

The national study showed employers did not drop health insurance over the five-year period, in general.  And overall, they didn’t dramatically change the percent of premium paid by employees. 

The study did not look at any change in benefits, particularly the  move to higher deductibles and co-payments.  

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.