Carried away by inflation.

• Author: Blodgett, John
• Position: Healthcare - Employee health insurance

New health insurance programs help ground rising costs Like many small businesses, Title West watched its health insurance costs increase 15 to 20 percent every year. Whereas other companies were choosing to reduce or cut employee health benefits outright in order to survive, Title West recognized that corporate health was a direct result of employee health--cutting benefits was not an option general manager Doug White wanted to exercise. Still, he needed to control costs.

"We looked at other insurance carriers," says White, whose company was already a customer of Regence BlueCross BlueShield (BC/BS) of Utah. But after exploring other company's products, he decided to remain with BC/BS and switched over to their new BlueChoices benefits program. "It gives us flexibility and helps us control our costs," says White. "It lets employees make [healthcare] decisions based upon their needs."

Employees typically have limited selections when it comes to enrolling in a health benefits package through an employer, especially when it comes to choosing out-of-pocket costs, but BlueChoices and other programs like it are changing the healthcare playing field by offering both lower costs to small businesses and greater choices to employees. "You usually find a tight cluster of price around high levels of benefits at higher premiums," says Steven Burrows, vice president of sales and marketing at BC/BS. "Small businesses asked us for more of a spread." Burrows' solution was to take the traditional health plan and separate the level of benefits from the network, allowing two decision points instead of one--and costs that range from 15 to 40 percent less than traditional products. 'That's never been done before," says Burrows. "You always bought a certain product and it came with its own network of doctors and hospitals," where employers and employees pay for levels of benefits far greater than they would eve r use.

That is, if a small employer offers health benefits at all, or if an employee chooses to enroll. Burrows' research shows that 52 percent of the uninsured in Utah work for small employers who offer no benefits, while 59 percent of the uninsured have chosen to forgo coverage because they don't see it as a necessity. It's not that everyone uninsured can't afford insurance--one third of the uninsured in the United States make more than $50,000 per year--it's just that those who can afford it often choose to spend the money elsewhere. Burrows would just...