On Wednesday, the State Health Benefits Commission will meet to consider a new set of health plans for government workers, who over the next four years will pay an increasing share of their health coverage premiums. The choices include plans with significantly lower premiums, but higher deductibles that require workers to pay more of their own medical bills.
AON Hewitt, a benefits consultant to the state, has developed a premium schedule for the plans, which the commission will consider Wednesday. The plans are being phased in, but in four years, the highest-paid workers will pay 35 percent of their premiums, while a worker earning $30,000 will pay 5 to 10 percent of the premium, depending on the level of coverage; everyone pays at least 1.5 percent of their salary for health care.
Employees in the state health plan, which include both state government and many municipal workers, have the option of remaining with their existing medical plans or switching to one of the new plans for the year beginning Jan. 1.
Family coverage under the existing Horizon plan has a $21,100 annual premium in 2011, according to the proposal. One of the new Horizon plans has a premium of $19,300, with higher co-pays, but the premium drops dramatically, to $12,100, for the least expensive of Horizon’s two high-deductible plans. Under such plans, though, the family would have to pay its first $4,000 of its medical bills, and that $4,000 deductible applies to prescription drugs. There also is a high-deductible plan with a $1,500 deductible and a premium of $17,900.
Hetty Rosenstein, New Jersey director of the Communications Workers of America, is a member of the health benefits design committee that last week unanimously approved the new suite of health policies. But she won’t recommend that her members choose the high-deductible plans.
“People don’t sign up for bad health care plans because of lower premiums if they can possibly manage to get good health care,” she said.
High-deductible health plans, coupled with health savings accounts, have been around for nearly a decade, and recently have been expanding in the private sector, as employers look to rein in soaring health care costs. According to the 2011 health benefits survey from the Kaiser Family Foundation, about 17 percent of workers with health coverage had a high-deductible plan in 2011, up from 13 percent in 2010. Large employers are far more likely to offer them, according to the survey, at 41 percent, compared with 23 percent of firms with 3 to 199 workers.
Laurel Pickering, CEO of Northeast Business Group on Health, said high-deductible plans “will continue to be an option that companies will offer to save money and get employees more engaged in their health.” She said she is enrolled in such a plan; both she and her employer contribute to her HSA.
“I can tell from personal experience that this has made me a better shopper for health care services,” Pickering said. “I take a more thoughtful approach to whether I or my family needs a health care service, and where is the best place to get that service.”