Lockheed Martin Works to Balance Rising Health Care Costs, Business Operations
The 2015 annual enrollment season is quickly approaching, but it’s important to know that we are continuously looking for ways to manage rising costs and prepare for the impending and future requirements of the health care reform law.
The LM HealthWorks Plan, an Aetna PPO (preferred provider organization), is Lockheed Martin’s primary medical insurance plan. A PPO allows plan participants the freedom to choose the doctors and hospitals they want to visit. By choosing preferred providers in the plan’s network, participants pay lower fees, but out-of-network providers are still covered.
As a business, it is important to us that we achieve a balance between delivering comprehensive health and wellness resources, ensuring what we offer aligns with our industry peers and remaining cost competitive. Our health care costs affect our business: Ultimately the cost to provide health insurance and wellness programs is passed to our customers.
Understanding the cost of health care has become increasing difficult as companies – both large and small – move to health plans that are tied to accounts, like the Lockheed Martin LM HealthWorks Plan HealthFund, which are used to offset out-of-pocket medical costs.
Standard copays may be easier for health consumers to comprehend, but employers have shifted to PPO plans that provide discounted rates for members and often have an account (like the HealthFund) that offsets the cost of the bill.
- More than $1.2 billion: That’s how much Lockheed Martin pays to cover the majority of health coverage costs for about 320,000 employees, family members and retirees.
- $11,457: What the average total health care costs nationwide per employee in 2012, according to Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care.
- $1,000: That’s the amount employees can earn toward their HealthFund each year.
- $600: That’s how much an employee’s spouse or same-sex domestic partner can earn toward their Health Fund annually.
- 34 percent: The average number of employees who roll over funds each year.
- $400: The average amount those employees rollover into their HealthFund.
What’s Next for Health Care Reform and the Corporation
As aspects of Health Care Reform continue to roll out in the next several years, Lockheed Martin will continue to take steps to comply with the law. But the Corporation will also have to continue to manage increasing costs.
Total health care spending in the United States is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970, according to a report from Aetna titled “The facts about rising health care costs.” In fact, health care spending will account for nearly 20 percent of gross domestic product – about one-fifth of the U.S. economy – by 2021.
You can learn more about the LM HealthWorks plan at www.lmhwplan.com.
Find out more about health care reform through www.HealthCare.gov.