"U.S. auto suppliers, who employ eight out of 10 workers in U.S. auto manufacturing, are now paying 60 percent more for employee health care than five years ago. They can expect their health costs to rise an additional 60% by 2010, unless solutions are implemented," according to Sean McAlinden, vice president of research for the Center for Automotive Research, (CAR)..
He stated these figures in a CAR press release.
His figures are from a survey of suppliers, funded by the Ernst & Young Global Automotive Center, that indicates despite a wide range of efforts from better purchasing leverage over health care vendors to employee cost sharing, suppliers continue to expect double-digit annual health care inflation through 2010. Thirty-seven member companies from the Original Equipment Suppliers Association, (OESA), were surveyed.
"Health care expenditures will remain an important competitive issue for suppliers," said David Andrea, vice president of business development, OESA. "The suppliers are stepping up their efforts to better manage their purchased health care services, asking their employees to share coverage, and looking for alternative models such as association programs."
Ontario produced 2,701,200 vehicles in 2004 while Michigan produced 2,598,400. Lower health costs due to Canada's health system was a major reason why, according to the Don Mills (Ont.)National Post.
Other factors cited include model changeovers and the relative decline of the Big Three automakers. Ontario also has been promoting the automobile industry, the paper added.
Citing their lower health care costs and higher productivity, Canadian autoworkers are resisting cost-cutting demands made upon them by General Motors, Ford, and Daimler-Chrysler, according to Bloomberg.com.
Canadian labor contract talks will begin next week.
Because of their national healthcare system, Canadian workers' health costs are less than United States' workers. As previously reported soaring health care costs recently caused General Motors to announce it will lay off 25,000 workers.
However, according to Bloomberg.com, despite these lower health costs, overall Canadian labor costs for the Big Three remain higher than American labor costs for Toyota, Honda, and other Asian and European auto makers.
The rising Canadian dollar also makes Canadian labor costs more expensive, it adds.
Increasingly, older Americans are deferring retirement because they fear they many loose their health benefits.
The Norfolk Virginian Pilot describes this trend.
Rising costs for healthcare benefits for teachers have made healthcare an educational issue. For example, the Fresno (CA) Unified School District is having a fiscal crisis largely caused by soaring health benefit costs. Unless it can pay its bills, it will face a state takeover. Its permanent superintendent had been ousted and, Chuck McCully, a retired former superintendent was installed to put things in order. His temporary tenure has been a challenge, according to the Fresno Bee.
The Bee describes McCully, the district's problems, and how McCully tackled them.
This is but one example of the growing challenges health costs are making for school districts nationally.
According to a survey by by Aon Consulting, "43 percent of the companies surveyed have adopted a formalized disease management and health promotion/wellness strategy for employees. Another 19 percent have been asked by senior management to explore opportunities associated with these programs."
However, as recently reported, a survey by the Deloitte Center for Health Solutions of 365 of the nation�s leading companies found that 62 percent of companies said they implemented wellness programs to improve employee health, and another 33 percent said they were considering such programs. Of those companies with programs, 64 percent said rising health care costs were �a major factor in our decision� and another 34 percent said high costs played some role.
Eighty-three percent of employers surveyed increased the amount of money employees contribute to their own health care coverage in the last year, according to a release issued by the Deloitte Center for Health Solutions. Another 30 percent said they had introduced consumer-directed health options, such as flexible spending accounts.
Businesses are also increasingly turning to wellness programs to get a handle on rising health care costs, and most believe these programs will have a long-term impact but few short-term benefits, according to a survey released today by the Deloitte Center for Health Solutions and the ERISA Industry Committee (ERIC).
According to a report issued by Hewitt Associates, employers are shifting copay costs for office visits, drugs, and emergency rooms to employees.
While the number of companies offering $20 office copays increased from 16 percent in 2004 to 25 percent in 2005, the percentage of employers offering $10 office copays has decreased from 29 percent in 2004 to 22 percent in 2005, it states.
The report cites widespread increased in drug copays.
The number of employers who require copays of greater than $50 for ER visits has increased 26 percent since 2001, it adds.
As a result, the rise HMO costs for employers rose at a lower level this year. The report did not cite how overall medical costs for both employers and employees may be faring, however.
Yesterday, General Motors announced that it would layoff 25,000 workers. Healthcare costs totaling nearly $6 billion annually or $1,500 per vehicle were a major cause of this layoff.
The Economist discusses how these costs are hurting General Motors and will probably cause the company to confront the United Auto Workers.
The unpaid expenses of the uninsured will cost, on average, $922 in added premium for employer-provided healthcare in 2005, according to a report issued by Families USA. It added that these added premium costs would rise to $1,502 by 2010.
In other words, one of every twelve dollars spent for employees' healthcare actually pays instead for the uninsured's healthcare, it states.
According to the report, health insurance premiums for family coverage in six states will be, on average, at least $1,500 higher in 2005 due to the unpaid cost of health care for the uninsured. These are New Mexico ($1,875); West Virginia ($1,796); Oklahoma ($1,781); Montana ($1,578); Texas ($1,551); and Arkansas ($1,514).
By 2010, the report states, eleven states will have those premiums, on average, $2,000 higher: New Mexico ($3,169); West Virginia ($2,940); Oklahoma ($2,911); Texas ($2,786); Arkansas ($2,748); Florida ($2,248); Alaska ($2,248); Montana ($2,190); Idaho ($2,152); Washington ($2,144); and Arizona ($2,028).
According to the report, only approximately one-third (35 percent) of the health care costs incurred by uninsured people is paid by them. The rest, (64 percent) is shifted to the insured, and added to the insured's premiums.
This shifted cost - the amount the uninsured do not pay for their health care which the insured instead must pick up - will exceed $43 billion nationally in 2005. In eleven states this cost will exceed $1 billion: California ($5.8 billion); Texas ($4.6 billion); Florida ($2.9 billion); New York ($2.7 billion); Illinois ($1.8 billion); Ohio ($1.4 billion); Pennsylvania ($1.4 billion); North Carolina ($1.3 billion); Georgia ($1.3 billion); New Jersey ($1.2 billion); and Michigan ($1.1 billion).
The Families USA report was based on data compiled by Dr. Kenneth Thorpe, Robert W. Woodruff Professor and Chair of the Department of Health Policy and Management, Rollins School of Public Health, Emory University, and the data are derived from the U.S. Census Bureau, the federal Agency for Healthcare Research and Quality, the National Center for Health Statistics, and other sources.
Families USA is a non-profit advocate group for health care consumers.
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