Report: More Insurance Costs Being Shifted to Montana Workers

January 12, 2007

The number of businesses in Montana that offer health insurance to their workers is roughly unchanged since 2003, but higher costs are increasingly being shifted to employees, a new report shows.

According to the report, about half of Montana businesses offer health insurance to their workers. That’s about the same number recorded in a similar survey three years ago.

But as the cost of employee health insurance increases, businesses are asking employees to pay a bigger share of those costs, said the report, which was based on a survey of about 500 Montana businesses performed in early 2006.

“It’s not like there’s a bad guy in this story,” said Steve Seninger, the University of Montana professor who prepared the report. “Employers are reacting in pretty much a rational, economic way, particularly when they’ve been beat up by health-insurance premiums for four or five years now.”

The report, financed by a state grant and released last month, made the following findings:

-Smaller businesses are not as likely to offer health insurance to their workers. In Montana, businesses with 10 or fewer workers employ about one-third of the state’s work force. About 52 percent of businesses with six to 10 employees offer health insurance, while only 63 percent of businesses with one to five workers offer health insurance.

-For businesses employing 11 to 100 people, one-fifth to one-fourth of them do not offer health insurance. Nearly all Montana businesses with more than 100 employees offer health insurance to workers.

-Average health insurance premiums for business-based policies increased 24 percent for single people the past three years, and 13 percent for family coverage.

-However, the average amount of money paid by the single employee for health insurance increased about 77 percent, from $35 a month to $62 a month. For family coverage, the amount went up 28 percent, from $122 per month to $156 per month.

-Two-thirds of the businesses that did not offer health insurance said the major reason was the high cost of insurance. Also, 80 percent of the businesses who provided insurance said the cost is “very difficult” or “somewhat difficult.”

The survey was funded by a state “health planning grant,” which is aimed at identifying the nature of Montana’s uninsured population and developing plans to provide health coverage for all Montanans.

A 2003 survey under the grant found that about 170,000 Montanans are without insurance — one of the highest rates in the nation, at 19 percent of the population.

Gayle Shirley, spokeswoman for the Montana Department of Public Health and Human Services, said final recommendations of the grant’s steering committee will be released soon.

The recommendations will include some short- and long-term solutions for providing Montanans with better access to health care, she said.

Seninger said he was surprised that just as many businesses are continuing to offer health care to workers, despite sharp premium increases.

Still, the cost remains unaffordable for many smaller businesses, and employees are picking up a bigger share of the costs when they do have insurance, he said.

“It showed that health care costs and health insurance premiums, as they continue to beat us over the head, year after year, are leading to a breaking point in terms of cost,” Seninger said.

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