Candid Talk From Both Sides of the Health-Care Issue An employee and an HR exec at a Midwestern financial services company spar over the cost of health-care coverage.

Employee X: What Choice Did I Have

Sure, I went to the annual meetings where they explained our health care.I listened carefully. But keep in mind that my company has changed this stuff three times in three years, and I had just figured out our last insurer.

But they told us that switching insurers would lower the costsfor employees and the company: My monthly premiums were going to go down $20 to $30, which sounded good, since health coverage for me and my son is a big expense--$360 a month.

What I had to learn the hard wayis that there are major, costly differences in what benefits you're promised and what you receive.

My son got very sick last year.He was in and out of the hospital, then took a turn for the worse and ended up in intensive care for four days. He recovered but had to keep seeing doctors, having tests and taking medications that had to be checked and adjusted. I struggled through it with our old insurance company. They didn't cover all of it, but the situation was settled and I was happy.

In January, doctors decided my son might be doing better.They had to repeat expensive tests he'd undergone last year to be sure. For one scan, he required extra care because he's allergic to a dye injected for X-rays. He made special preparations at home the day before.

When we got to the hospital,I first had to talk with a woman about the payment for my son's test. Because he had prepped for it at home, she said my new insurer would call it an outpatient procedure and wouldn't cover all of it. I had to pay $1,000 or, I was told, the scan would be put off. Where was I going to get $1,000? I'd have to dip into my few savings. I lucked out. I could tap a health-saver account I had signed up for at work. But my "rainy day" medical fund for the year was gone by February.

What choice did I have?I think my company has my best interests in mind, but it has to make a bottom line. I keep thinking, why couldn't we keep our old insurer? Why couldn't I pay a higher monthly premium to avoid huge, major medical bills? Bad experiences taught me that this insurance stuff is complicated--out-of-network doctors, outpatient charges, co-pays, deductibles. I could go on and on.

I couldn't appeal the decisionthat cost me that $1,000. I was stuck, like most folks are when it comes to health care. We've got to get it through our employers. They pick the provider and pretty much the coverage. Yes, it seems fine for the routine. But it's hard to look at the paperwork they give you and see how much the big stuff might cost. What can you do? My son's my whole world and I'll do whatever I can for him. --As told to Craig Matsuda

Employer X: We Have a Budget, Too

I think more people are starting to better understand health-care issues.That's great, because for most companies, and especially for us in HR, it's a constant, horrible process to get the best coverage for employees. We're no sooner done than we're back out to market, figuring how to make it work.

It starts with double-digit increases in annual health-care costs.Over the last decade, we've seen jumps of 7%, 12%, 15%--and we're looking at 12% this year. I worked in one spot where our provider hit us with a 40% increase for the same plan. We'd love to stay with one insurer, but it doesn't work that way any more.

Insurers seek to maximize profit.They review everything they do with us and what it costs them. Utilization is key: What illnesses do our employees suffer? How many have cancer or chronic conditions? Did we have major surgeries? Who's taking what drugs, especially expensive ones? What's our work force like00mostly lower paid, entry level or higher compensated, higher educated?

And then the health-care vendors renegotiate--hard.Our deals go year to year. Other companies come in. They low-ball your guy to steal your business. But for us, it's hard to get good comparables: What are they covering and what will it really cost us?

We offer health-saver accounts.We try high deductibles. It's a balancing act: Just how much can our employees00from the executive suite to the mailroom00bear in affording that monthly premium?Payroll is one of the biggest expenses for a company, and medical benefits are among the biggest ticket items there. It's millions and millions of dollars. Companies on average pay 75% of the cost to insure employees; workers pay the rest.

But the bottom line is, we have a set amount we can spend.We want to provide the best benefit to the most employees. Can we ax a tuition reimbursement program used only by a few? Do we forgo the company picnic? Or maybe it's an FTE issue, and we hire fewer employees or we let some go.

We try to educate folks about benefits. It's tough.Open enrollment is the time we talk to them most. It's grueling, right at the end of the year with the holidays. The packages are incredibly complex--with co-pays, deductibles, networks, exemptions--and there's no way to anticipate every situation.

I hear complaints.And it makes me angry when our people don't get treated right--I hear about complicated claims processes, poor service or when something big and bad happens to an employee and they're fighting over coverage. Yes, we can threaten or even terminate our insurers if they don't treat our people well. But then what? --As told to Craig Matsuda