Health-insurance costs to jump starting July 1

Thursday, May 2, 2002

Vol 8, Issue 9

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By CLAY EALS

If a loaf of bread cost $2 in 1996 and $2.36 now, how much did the cost of the center's health insurance rise over the same span?

The answer: It doubled.

And because the center cannot absorb the full cost of the insurance hikes, faculty and staff soon will bear more of the burden. They'll pay increased premiums and pick up a greater share of out-of-pocket medical costs.

The center will increase the faculty-and-staff cost of health insurance for fiscal-year 2003 (July 1, 2002, through June 30, 2003) in the following ways:

• Begin charging employee-only premiums (Premera $25 per month, Alliant Plus $10 per month, high-benefit dental $5 per month).
• Increase employee-plus-dependent premiums by $17 to $38 per month, depending on the chosen plan and number of covered dependents.
• For those covered by Premera Blue Cross, add a $200 annual deductible for services other than office visits and mammograms, increase office-visit and brand-prescription-drug co-pays by $5 and boost the yearly out-of-pocket maximum by $250.
• For those covered by Alliant Plus, increase office-visit and prescription-drug co-pays by $5.

Both the rising cost of medical care and the increased use of health benefits by faculty and staff are driving the rate hikes, said Jonathan Sheppard, manager of compensation/benefits.

"Insurance for a group of our size is basically the cost of paying claims plus a small amount to the insurance company for the administrative work," he said.

"We are effectively looking in a mirror and seeing what it costs to pay for our own health care. We're also seeing that as a group we are getting older, we are treated more effectively through new drugs, technologies and procedures, and our life expectancy is increasing."

Compounding the situation, Sheppard said, is the fact that the center this year can absorb only 10 percent of the increases.

"Active grants typically have an inflation factor of only 3 percent, and because of the economic downturn, both investment income and fund-raising are lower this year," he said.

"We also need to be sensitive to the reasons that talented people choose employment at the center. Over and over, we hear staff say that one of their attractions to the Hutch is 'the great benefits we have.' So as we pieced together this year's benefit program, we tried to balance the center's financial constraints with the impact on recruiting, retention and morale."

The largest cost increase this year was in the Premera plan, at 31.9 percent. To help assess the tradeoffs between higher premium costs and changes to the plan design, Sheppard convened a group of 12 Premera participants who arrived at the combination of premium hikes and out-of-pocket increases.

The premium increases for faculty and staff do have a bright side, relatively speaking, Sheppard said, in that they allow the center to retain the basic design of the health-insurance plans.

"While employee premium contributions will increase significantly, employees as a group still will pay only 16 percent of the cost of their health insurance," he said. "The plan designs are still richer and costing staff less in premiums than the average plans among comparable employers."

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Want more information?

Got specific questions? Want to find out more by consulting Human Resources staff in person? Three benefits fairs are scheduled this month:

• Friday, May 17, 10 a.m. to 2 p.m., Outside Double Helix Caf? and in Sze Conference Room.
• Monday, May 20, 10 a.m. to 2 p.m., Seattle Cancer Care Alliance, first-floor conference room.
• Tuesday, May 21, 1-5 p.m., Met East 927A. Also, if you want to learn more about the context of this year's changes and provide feedback about them, two hour-long forums are scheduled on the same days and near the same locations as the benefit fairs:
• Friday, May 17, 2 p.m., Weintraub B1-072.
• Tuesday, May 21, 2:30 p.m., Met East 924.

You also can get more information by calling Human Resources at 206-667-4700, or by e-mailing jsheppar@fhcrc.org, or visiting http://www.fhcrc.org/admin/hr/ben/.

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