[Nesster]

http://www.nytimes.com/2010/11/10/business/10insure.html?_r=1&hp

With health care costs climbing even higher during this enrollment season, more employers are adopting a tiered system to pass on the bulk of those costs to their employees by assigning bigger contributions to workers in top salary brackets and offering some relief to workers who make less money.

For years, employees have seen what they pay toward health care go up as companies ask them to contribute more to premiums and deductibles. But now, as people enroll in health plans for the coming year, the sticker shock is more jolting than ever because so many companies are passing on to their workers most, if not all, of the higher costs.

A worker’s share of a family policy is approaching $4,000 a year on average, and is most certainly going to keep on rising through the next few years. For lower-salaried workers, those additional costs have only compounded their struggle in a brutal economy

...

Even as companies warily eye the uncertain landscape of the new health care law, especially with the Republican midterm election gains at the federal and state levels, they also are seeking novel ways to deal with year-after-year increases in health care, because the share-the-pain era is coming to an end.

Corporations had absorbed some higher costs in recent years, along with their workers, but have recently passed all, on average, onto employees. In 2010 alone, a worker’s share of the cost of a family policy jumped an average of 14 percent from the previous year, according to a recent survey by the Kaiser Family Foundation. In real money, that is an additional $500 a year deducted from a paycheck.

“It feels so much worse this year than it has in prior years,” said Helen Darling, president of the National Business Group on Health, which represents employers who provide health benefits.

Across the country, the percentage of workers with coverage in large companies whose premiums vary with their wages climbed to 17 percent in 2010, up from 14 percent two years ago. About 20 percent of employees who are covered by large companies in the Northeast, which has suffered from a combination of high unemployment and steep medical costs, have the premiums they pay tied to their wages, according to Kaiser.

“If health care reform hadn’t happened, there would be more companies going in this direction,” said Ms. Darling, alluding to the interim period between the law’s passage this year and 2014, when it is expected to take full effect.

Some corporations have gone further than others in trying to spare their lowest-paid workers, even as they increased the cost of premiums for everyone else. This year, for example, employees at Bank of America who make $100,000 or more a year will pay at least 14 percent more for coverage for 2011. But workers who make less will actually see their contributions decrease, although their deductibles and co-payments will stay the same. Employees earning less than $50,000 could see as much as a 50 percent drop in the amount deducted from their paychecks, as compared to 2010. The bank says it is making up the difference.

"We’re obviously committed to helping our associates and their families manage rising health care costs,” said Kelly Sapp, a spokeswoman for the bank, which employs 250,000 people with a wide range of salaries nationwide.

--

For most workers, however, the trend has been very clear: the increase in health care costs has easily outstripped any rise in their incomes. Since 2005, while wages have increased 18 percent, workers’ contributions to premiums have jumped 47 percent, almost twice as fast as the rise in the policy’s overall cost, according to Kaiser.

Companies have also become increasingly creative in the ways they shift costs. Instead of simply raising premiums or increasing the size of the deductible workers must pay before their coverage kicks in, employers are increasingly asking their workers to pay more the cost of coverage for their dependents, or to pay more of their share of a hospital stay or an emergency room visit. “Employers do a bit here and do a bit there,” said Gary Claxton, a policy expert at Kaiser.

The result is that while employees may be paying more, they may not know how much more. “Deductibles are straightforward, and even co-payments are straightforward,” said Mark Rukavina, the executive director of The Access Project, a Boston advocacy group. “You need multiple spread sheets to figure this out.”

In other words - there's a double income redistribution going on - from better paid workers to a) insurance companies and b) subsidies for lower paid workers.

As these are large corporations - Bank of America's market cap of $122,900 million is about the same - or larger than - the GDP of countries such as Hungary, Peru, New Zealand, Kuwait

---

Last edited by Nesster; 11-09-2010 at 02:15 PM.

[jolepp]

In a strict sense this is not socialism as that that is a system of government (or the ideology promoting the same) where the state/government controls the means of production (or so I seem to recall, then again, I guess that over there the definition, or at least the connotations are very different than over here in Europe ;-)

[Nesster]

True, except for fun of course I argue that the big multinationals are in effect internally sovereign governments (not seriously)

[GeneV]

True, except for fun of course I argue that the big multinationals are in effect internally sovereign governments (not seriously)

The analogy of public corporations to governments is much closer than comparing them to the small business around the corner.

With a public corporation, you have a huge organization, run by people hired by a board elected by a large number of people who don't know anything about the candidates. That sounds more like a government than it does the corner hot dog stand.