Health Plans: At the Tipping Point?

Michael Fiaschetti, market president for the Pennsylvania central region at Highmark Inc., the Pittsburgh-based health insurer of Blues plans, says we're not at a tipping point yet, but we're close. In response, Highmark is working with employers to avoid that by implementing health and wellness programs to improve or maintain the health of employees and dependents. This focus could also help the companies through less absenteeism, presenteeism, and better productivity, he says.

Fiaschetti says many employers are also incentivizing employees to complete health risk assessments and enroll in wellness programs. He expects that trend to continue as more employers link a member's premium cost levels to participating in those kinds of programs.

"Many employers are asking employees to take control of their health," says Fiaschetti.

But there are other experts who think the system has already reached the tipping point. As an example, Paul Fronstin, PhD, senior research associate at Employee Benefit Research Institute in Washington, DC, points out that the average small firm PPO deductible increased to approximately $1,000 in 2008 compared with $667 in 2007 . "Given how vast the increase was in that one year, that may signal that we have reached the tipping point."

As employers pass more health costs on to employees, they face yet another dilemma. By increasing premiums, businesses and health plans could ultimately cause healthy Americans to flee health insurance because they don't think it's worth the costs. That would leave insurers and employers with a larger percentage of sick people and without the healthy people to help fund healthcare utilization.

"That's not going to save the employer any money," says Fronstin.

—Les Masterson