Daybreak Digest
Health Insurance Costs For Employers Are Rising...
...at three times the overall inflation rate." This is from The Associated Press, December 2000. From the Business Insurance Workers' Compensation and Disability Management Conference, January 2001, "Health care costs are increasing at double-digit rates in 2001, with prescription drug costs rising even faster. Overall, employers' health care costs are up by 10.3%" and "...the cost of prescription drugs is 14.6% higher than a year ago". According to Ivy Silver, an employee benefits broker in Jenkintown, Pennsylvania, "Over the last several years, prescription-drug-plan premiums have risen as much as 50 percent".
Enough? In researching this subject, the one comfort is that we are not alone. Statistically, the smaller the company, the greater the increase for medical premiums, and many companies, not unlike Daybreak, have been subjected to these medical premium increases since 1999. As stated, a large percentage of the increase is due to increased costs of prescription drugs. Expenditures nationwide more than doubled from $65 billion in 1995 to $125 billion in 1999. It is projected that prescription drugs could cost as much as $243 billion by 2008.
So what does this mean to you? It means that, for the second consecutive year, Daybreak has wrestled with the increased costs and how to continue to provide medical coverage without increasing the employee's portion of the premium to an amount that no one can afford. Total costs increased in 2000 at a rate of 8% for the HMO and 40% for the PPO. In 2001, the rates increased 41% for the HMO and 10.7% for the PPO. The good news? Daybreak has again absorbed most of this cost rather than passing along the entire increase. The Company pays 75% of the health insurance premium for employee only coverage The total premiums paid by Daybreak have increased approximately $90,000.00 over the last two years.
While the future is uncertain in the area of health coverage costs, one thing remains constant; your health is very important to Daybreak and we will continue to do everything we can to make the health coverage affordable.
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