American workers are facing some daunting problems as the New Year approaches. The economy is slowing and many will find the cost of their health care insurance is going up. CBS' Jeffrey Kofman has been looking into the increases and their likely effects.
With Christmas around the corner, they are as busy as elves at the Collin Street Bakery.
"You're only as good as your ingredients," Bob McNutt, president of the Collin Street Bakery.
But at this company, which has been spreading sweet Christmas cheer for 104 years, one ingredient is souring the seasonal cheer for these elves. Next year health care costs for employees are soaring.
"It'll certainly affect our business from a cost standpoint," says McNutt. "It's obviously inflationary but even more so i think it will affect our business in terms of what it may do to our personnel.
What recent national surveys show is that Colin Street is not alone. Starting in 2001, most companies' health plan costs are likely to go up an average of 11%. Some could go up as much as 20%.
Presription drugs are driving it up more than anything. Some business owners will shoulder that increase themselves--an average $485 per worker. But many will ask employees to pay a share--at least a quarter--or about $122 more a year out of pocket, some could have to pay much more.
The concern is that an increase in health care costs could force many workers to drop their coverage.
"Many workers are saying no thank you, not because they don't realize the importance, but because they might have to shoulder 200 dollars a month, Jack Meyer, health policy analyst.
At Collin Street, workers will pay about 10% more next year. For now, management plans to continue paying most of the premiums. But two months from now the policy comes up for renewal
"It is not our intention to change the 90-10 balance but if we continue to see increases like this it is certainly an option we'll leave on the table." says McNutt.
Even during the record-breaking economy of the 90's, Americans without insurance numbered about 43 million. With signs that the economy is beginning to slow down, and health care costs continue to rise, look for that number to go up... way up.
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