Monday, November 25, 2013

GCI predicts higher medical costs under Obamacare as more uninsured sign up for company's coverage

That's according to a new Wall Street Journal story that says Gannett and other employers expect the Affordable Care Act will increase the number of workers seeking company-provided health care to comply with the law's requirement that all Americans get medical coverage by Jan. 1.

Because Gannett funds its own plan, that would raise the company's annual medical costs, now well over $100 million a year for its 30,000 employees.

The WSJ attributes the role of uninsured workers in Gannett's higher medical cost forecast to a person familiar with the company's plans the paper didn't identify. It does not say how many employees are currently without any medical coverage.

Gannett announced a major shift in its medical plans in September, switching to one plan from two, and adding steep deductibles that must be met before plan coverage kicks in. With those deductibles, an employee with coverage for just themselves must pay the first $1,500 in doctor visits and other costs before the company starts paying 80% of the rest. Employees with family plans pay the first $3,000 out of pocket.

The company also scrapped a policy where employee premiums were set according to a sliding scale based on how much they earned. Now, the lowest-paid worker pays the same as the highest paid.

It's not all Obamacare
At the time, CEO Gracia Martore principally blamed Obamacare for the company's decision to boost employee premiums and deductibles. But she offered no details on the reform law's specific role. The WSJ story is the first I've seen to do so.

But the paper says that new, higher employee premiums aren't solely because of Obamacare -- a point I made when Gannett first announced its new plans.

"Employers have been pushing more of the cost of providing health insurance on to their workers for years," the WSJ says, "and firms that aren't booking much sales growth due to the sluggish economy are under heavy pressure to keep expenses down."

Gannett's full-year 2013 revenue is expected to dive 3% to $5.2 billion, according to a survey of Wall Street stock analysts. But those same analysts forecast a 17% surge in revenue to $6.1 billion next year because the broadcasting division will sell more ads with the winter Olympics and the midterm elections.

According to the WSJ, Gannett says more than half of its employees will see monthly premiums fall by 12% when the new plans start in January. But factor in the higher deductibles and the savings will almost certainly evaporate.

And for the other half, of course, premiums will rise on top of the higher deductibles. "For some employees, the result was a 60% jump in monthly premiums for family coverage, to $575 from about $360," the WSJ says.

Earlier: Here are two FAQs about Gannett's new medical plan.


  1. I think the WSJ got it backwards, at least as regards Gannett. I get my insurance elsewhere, but most people I know in my shop who have used GCI insurance have explored the state exchange and at least are going with alternatives found there, as GCI's coverage is so expensive. I find it hard to believe usage of Gannett's high-cost insurance is going to rise.

  2. This doesn't compute. The premise is there are some employees, for whatever reason, chose not to accept the company's health care plan. Presumably they get it through a spouse, which would not change under the mandate, or they chose to go without, which presumes they are young and healthy and don't feel they need for it. If they take the insurance they would strengthen the explain how this would increase premiums. I am missing something here.

    1. I don't think it makes sense, either. And it's worth noting there are no hard figures on the number of employees who have gone without any coverage of any kind. I'm sure there are some there, and many no doubt are younger workers who don't think they'll need insurance.

      But how many of the 30,000 are we talking about? The company knows, but doesn't say. What it does provide, of course, is the figure -- 12% -- that is favorable to the company's image.

  3. My family's not going to cost them more...We had to drop family coverage because the premium for it almost doubled what we were paying and now my wife and son will be without any coverage beginning Jan. 1...Gannett's decision to make family coverage unaffordable for many of its employee's rest entirely in their lap and the need to boost their bottom line and has nothing to do with the ACA...What I blame the ACA for is the "family glitch" that for now means my family can't go through the exchange and utilize the subsidies that we need to make coverage affordable...Praying for a healthy year and that Congress will amend that situation asap.

  4. The 12% seeing their premiums fall are mostly in upper income brackets and are getting the benefit of the elimination of the tiered contribution schedule.

  5. Thank you, GraciaCare!

  6. Gannett strikes again. Always on the lookout for ways to screw employees, save money, and feed the Wall Street beast. They will use ACA as a cover for their disgusting ways. This is the same company that brought us TPP.

  7. Theyll combat rising costs by cutting more employees. Its the Gannett way.

  8. Ridiculous, my husband works for this company family plan next year went from 300 to $600, with no co pays hears the catch plan pay 100 percent preventive care, don get sick you pay for doctor visits and medications. What the F, come on, can you say debt city, this is not a joke this is children and peoples lives they are playing with. Oh mighty dollar bill?? what about the peoples health?? We have a plan that pays for nothing except preventive, we are looking into the exchange. This is stealing money form employees pay checks. Shame on them!!!!

  9. And no one is even talking about how they ONLY offered a high deductible plan WITHOUT an HSA option. Do you know what happens if you load up your FSA and don't use the money??? IT GOES BACK TO F@#$#(* GANNETT! That's right people! If you have an HSA you can slowly accrue wealth over time, you can build up enough savings that having a high deductible health insurance plan isn't the end of the world. It rolls over from year to year. It's a gorgeous thing. But did Gannett offer us that? OH NO! that would be far to logical and ethical. Instead they offer us a bullshit FSA option that no one can afford. Even better? All that is available in it is what you've put in so far. So if you were hoping to put in $50 a paycheck and build it up, congrats on having enough money for basically April you might have enough set aside to have an ear infection, but don't count on it. Screw their plan. Add more money to your retirement savings each paycheck if you can possible afford it - it's still tax free- and in the case of major medical emergency you can usually take money out. This company sucks so hard. Please take a look at how much money they 'recaptured' from FSA's next year in their financial reporting and make a HUGE stink about it. By then I hope to be anywhere but here, and hoping I've put this all behind me. This company is shameful. I love what newspapers were, but this is infuriating every single day. I rue the day when the local owner sold our paper to Gannett. Sometimes I think about going to their house and begging them to start a competing paper. We'd all quit and go there tomorrow.

  10. What are you ranting about? There was an HSA offered...


Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

Note: Only a member of this blog may post a comment.