University System employees will see higher premiums next year

Tens of thousands of University System of Georgia employees will face average increases in their 2020 health care premiums of 5.5 percent to 7.5 percent.

Also starting next year, a university employee will have to pay a $100 monthly surcharge for spousal coverage if the spouse has health insurance offered by an employer but does not take it.

The premium increases follow projections of similar hikes among large employers for health benefits next year.

Large U.S. employers are predicting that their health care costs for 2020 will rise by a median of 6 percent if they don’t make adjustments to deal with the trend, a recent survey found.

“Across the country, health care costs are rising, and Georgia tracks closely with national health care costs trends,’’ said Jen Ryan, spokeswoman for the University System of Georgia. “In fact, nationally, health care costs are expected to rise 6 percent in 2020, which is higher than the national trend for the last two years.’’

In contrast to the University System plan, there will be no premium increases next year in the much larger Georgia plan covering state employees, teachers, other school employees and retirees. It’s the second straight time that these health benefit costs will remain the same from one year to the next for non-Medicare members of the State Health Benefit Plan, which covers about 660,000 people. That’s an unusual break from the trend of rising costs.

The Kaiser Family Foundation recently reported that on average, health spending by families with large employer health plans (representing premiums and out-of-pocket costs) has increased twice as fast as workers’ wages over the last decade. This increase has been propelled in part by rising deductibles, which are an increasingly prominent feature of many employer plans.

“The first and most obvious is that health care costs for everybody are increasing faster than incomes,’’ said Bill Custer, a health insurance expert at Georgia State University, in commenting about the Kaiser analysis.

There are about 90,000 members in the University System health care plan, including active employees, dependents and retirees. Of that total number, 85,323 are active employees and their dependents and 4,943 are early retirees and their dependents.

The University System said it had unexpectedly high medical claims costs in 2018 and the first part of 2019.  As a result, the projected increase in plan costs for 2020 is $47 million.

The benefits changes seek to address rising costs, encourage appropriate plan utilization, and ensure long-term sustainability, officials said.

The total plan changes are estimated to save a total of $29.5 million.

One big contributor to increasing costs in the University System plan was high spending on prescription drugs.

Prescription drugs costs have increased 29 percent in the last two years and now account for 31 percent of the overall health care plan costs in the University System plan, Ryan said.

Custer said that nationally, “an important driver of health care cost inflation over the last decade has been prescription drugs. That fact illustrates one of the fundamental dilemmas facing health policy: New drugs save lives and increase quality of life, but they are not priced by a competitive market.  We could lower the costs of these new drugs and increase access to care, but how would those policies affect the flow of new life-improving technologies?”

The working spouse surcharge is common among private sector employers, Ryan said. An actuary estimated that this change may affect about 25 percent (or 4,800) of covered spouses. The estimated savings for this change is about $5.5 million.

University System co-pays will be increasing by varying degrees, but deductibles will remain the same.

Also, to improve employees’ health, the university plan is adding weight loss programs. plus diabetes prevention and management programs.

Open Enrollment for active employees will run from Oct. 28 through Nov. 8.