December 7, 2007

elevate Answering the Tough Questions

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Medical Center leadership answers the tough questions about what the elevate program is and what it means for the people who work at VUMC.

Question: Why are monthly premiums for the employee health plans rising again this year?

Answer: Each year, sharply rising health care costs drive increases in health benefit costs for U.S. employers. Large employers who are self-insured, like Vanderbilt, are heavily impacted because the company plan pays the health care bill.

Since 2000, per member claims costs for Vanderbilt University employee health plans have risen 81 percent (from $3,591.76 to $6,497.93), which works out to more than three times the general U.S. inflation rate. Our employees have, of course, felt this increase in terms of higher out-of-pocket costs, including higher monthly premium contributions.

This year's increases are modest compared to increases in some recent years. Depending on which health plan option an employee chooses, individual coverage will rise from $38 to $41, $44 to $47, or $57 to $61, and family coverage will rise from $163 to $176, $189 to $204, or $245 to $264.

The target for 2008 is for Vanderbilt to cover 79 percent of premium costs, with employees covering the remaining 21 percent — the same cost share that has been in place since 2004. This keeps Vanderbilt very competitive in the labor market. According to a Hewitt Associates survey, other academic medical centers on average covered just 72 percent of health care premium costs.

Also, Vanderbilt has maintained health plan options with no co-pay increases for doctor visits or prescriptions for the past three years.

— Jane Bruce, director, HR benefits administration