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Blaine Bos

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Employees are bearing more of the costs because double-digit increases are unsustainable.

We used to think of cost-shifting as something you could do only every so often. But we're seeing a new willingness on the part of employers — born of desperation — to shift cost in successive years to achieve acceptable cost increases.

Small employers also have less flexibility to tinker with plan design. They're most likely to shop around for a cheaper plan.

The one-time cost reduction employers experience as their workers move into less expensive plans has been masking the underlying cost trend. Migration out of indemnity plans slowed to a trickle last year, so we're finally seeing real trend reflected in the national cost figures.

It's too early to tell whether the decline in HMO/POS enrollment is a short-term phenomenon or -- more ominously -- a sign that these managed care plans may not become the centerpiece of the nation's health care delivery system after all.

In New York, where providers operate very independently and generally belong to a number of overlapping managed care networks, average cost is a whopping $4,743 per employee. But in Los Angeles, another big and expensive city, HMOs are very effective, and cost is only $3,375.

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