Employees Paying More of Medical Bills, Study Finds

Salaried employees of large U.S. companies are paying a bigger share of their medical expenses than they did five years ago, according to a soon-to-be-released study of employee benefits.

Hewitt Associates, a suburban Chicago consulting firm, conducted the survey of 227 major employers.

Medical plans are paying more catastrophic-illness costs but employees are paying a larger share of other medical expenses, researchers discovered.

Hewitt found that just 29% of the survey respondents’ medical plans covered 100% of hospital room and board charges, compared with 53% in 1984.

The more typical practice is for the plan to cover 80% of hospital charges and require employees to pay 20% up to a specified maximum, usually $2,000 or less. The plan then kicks in and pays 100%.

Employers also are trying to better manage medical costs by encouraging employees to seek second surgical opinions and have medical tests done on an outpatient basis.

Workers also face a wider array of employer-sponsored savings plans, and are increasingly being asked to take a more active role in designing their own benefits packages.

“There is a desire among employers to involve employees more in all aspects of benefits,” said Howard Levin, a partner in Hewitt.

“There’s a sense that when employees participate, they get involved more and have a greater appreciation” of their benefits, Levin said in a telephone interview from his Lincolnshire office.

In 1984, Hewitt found that 62% of companies surveyed offered the same medical coverage for surgery whether or not the employee got a second opinion. In 1988, only 29% of the respondents offered the same coverage regardless of whether a second opinion was obtained.

“Cost-sharing causes people to be more careful consumers of health-care services,” Levin said. “The employee who has to pay for part of any service (used) is going to use more discretion.”