Companies See Health Costs Rise; Employees Could Face Changes in Coverage
General Motors Co. spent $3.9 billion, or 2.1% of 2000 net sales, on health care coverage last year, and the company predicts that costs will rise 10% this year -- "driven" by "greater use" of
prescription drugs and higher prices for hospital and physician services, the
South Florida Sun-Sentinel reports. General Motors, the largest private purchaser of health insurance in the United States, hopes to control costs by "encouraging" the use of generic drugs. In addition, other employers have begun to pass rising costs on to employees through higher co-payments on prescription drugs and higher premiums. "The real story for 2001 is passing on costs (to employees)," Paul Ginsburg, president of the
Center for Studying Health System Change, said. According to a
Henry J. Kaiser Family Foundation study conducted last year, health insurance premiums rose 8.3% in 2000, the largest increase in seven years. Employees, however, paid a smaller share of the premiums last year than in 1999: Single employees on average paid 14% of their premiums, down from 16% in 1999, while families with employer-sponsored coverage paid 27%, down from 32%, the study found. Employers "were willing to foot the bill" to attract and retain employees during a tight labor market in recent years, but in an economic downturn, they "might find they don't need to try so hard to get workers," Larry Levitt, vice president at the Kaiser Family Foundation, said. The costs of providing benefits -- including health insurance, vacation, paid leave, overtime and unemployment insurance -- increased 1.3% in Q1, the
Labor Department reported Thursday (Hallam, South Florida Sun-Sentinel, 4/27).
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