Most of the southeast Michigan companies surveyed will reduce or eliminate coverage

The majority of businesses in southeast Michigan expects to scale back health care benefits for employees, while more than one-quarter are considering eliminating employee health coverage, according to a survey.
The troubling news for Metro Detroit workers was among the key findings of a survey of executives from 203 local companies by Troy-based John Bailey & Associates. The results will be released today at the Detroit Regional Chamber's Business Leadership Conference on Mackinac Island.
The study shows 61 percent of companies are considering reductions in future health care benefits for employees while another 27 percent may eliminate medical insurance for workers.
Three-quarters of the business leaders surveyed also said smokers should pay more for insurance premiums, while nearly as many said individuals who lead a healthy lifestyle should get cost advantages.
Overall, 86 percent of the business owners said employees can expect to pay a larger portion of health care premiums.
Mike Lefich, owner of Excellis Computer Services in Oak Park, participated in the survey. His business has six full-time staffers and a number of contract workers.
Just three years ago, he offered all his employees fully paid family medical, dental and vision insurance. But he doesn't anymore.
"I pay for the individual employee's policy, but if they have a wife or family, they now have to pay for those themselves," Lefich said.
"A monthly insurance premium for a family of four now costs $1,200. We just couldn't afford it. We just don't have a choice anymore."
Although he hasn't pushed it yet, Lefich said workers who smoke should pay more for health insurance.
"I just don't think the employer should have to carry the entire health burden for someone who smokes," he said. "We can't stop someone getting hit by a bus, but we can do something about an unhealthy lifestyle."
About 75 percent of those companies interviewed in the survey had from a few to 100 workers, 15 percent from 100 to 500 employees and 8 percent more than 500. The companies were split equally between Oakland and Wayne counties, with 10 percent from Macomb.
Not all employers in the survey want to leave their workers without medical insurance. But with medical premiums increasing about 10 percent a year -- 73 percent since 2000 -- half of them believe others need to help pay for the insurance. They suggest a firm pay 48 percent, workers 27 percent and the government another 25 percent.
Dr. Catherine G. McLaughlin, a health care economist at the University of Michigan's School of Public Health for 23 years, said the issue of rising health care costs isn't new.
"A lot of businesses are finding that health care costs are going up and up and up," McLaughlin said. "At the same time, workers aren't willing to face wage decreases, cuts in holiday or vacation time or other benefits. Employers now are saying they just can't handle it anymore.
"Some companies are just finding it easier to eliminate all health care benefits."
McLaughlin said she's not surprised that 75 percent of company owners want to charge extra to employees who smoke. She was recently part of a 13-member federal commission that interviewed thousands of individuals about public health issues.
She said the vast majority felt medical insurance premium rates should be based on an individual's ability to pay.
"A notable amount, however, thought people should pay by their lifestyle like smoking, drinking or being overweight," she said. "We heard loud and clear that individuals have to take more responsibility for their own health."
Michael F. Cannon, director of health policy studies at the Cato Institute in Washington, D.C., said the health care crisis will continue until rising costs are brought under control.
He blames a portion of it on workers taking advantage of the health care system at the expense of their employers.
"When you have an employer providing health insurance to the workers, you create a tragedy where the workers are spending someone else's money," Cannon said. "These employees end up wanting more and more, and the health care benefit costs go up and up.
"The only answer is for employers to cut back. If workers are paying for more of their health care directly as opposed through insurance, these workers are going to be much more interested in eliminating wasteful spending."
He is in favor of transferring costs to those in higher-risk categories.
"That's how insurance is supposed to work," Cannon said
www.medequote.net