Human Resources: Rising Health Care Costs Worrying Workers, Watson Wyatt Survey Finds

WASHINGTON, May 24, 2007 – Rising health care benefit costs are causing
considerable angst among U.S. workers, according to a new survey by Watson
Wyatt Worldwide, a leading global consulting firm. However, most workers
say they are willing to improve their own health to help control future
costs and prepare themselves for a more enjoyable retirement.

In its survey of nearly 2,100 U.S. workers, Watson Wyatt found that more
than half (51 percent) of respondents are highly concerned that they won’t
be able to pay for health care coverage when they retire. More than
one-third (35 percent) of respondents are concerned that a major medical
expense would ruin them financially. Many workers are also worried about
the impact of rising costs in the near term. Two in three (68 percent)
believe their deductibles and copayments will increase in the next two
years; more than half are worried that their employer will reduce their
health benefits coverage.

“There’s no doubt the rise in health care benefit costs is taking its toll
on today’s workers both financially and in the form of increased stress,”
said Cathy Tripp, a senior group and health care consultant at Watson
Wyatt. “It’s in employers’ best interests to help employees see the big
picture and plan for the future. Employees who understand how the benefits
choices and health decisions they make today can affect them in the long
run will be less worried about their prospects of enjoying a healthy and
financially secure retirement.”

According to the survey, 12 percent of workers have reduced contributions
to their retirement savings plans because of higher health care costs,
while 18 percent have cut back on contributions to other savings. About one
in four workers also reported higher stress levels due to rising health
care costs.

The majority (61 percent) of workers say they see a connection between
maintaining a healthy lifestyle and controlling cost increases. Moreover,
many employees are willing to make changes in their lifestyle to improve
their current health status — 31 percent are in the process of doing so,
and 27 percent are considering making a change.

The survey found that six in ten employees have tried to take better care
of themselves, with 37 percent getting an annual physical. In addition, 42
percent are attempting to control health expenditures by choosing a
lower-cost drug option when available.

“Employees have been getting the message many employers have been trying to
send — that improving one’s health pays dividends now and in the future,”
said Kathryn Yates, global director of Watson Wyatt’s communication
practice. “But the lines of communication go both ways. By listening to
their workforce and tailoring programs to meet employees’ needs, employers
will be better able to help employees tackle smoking, obesity and other
health management issues.”

About the survey

The Watson Wyatt survey, “Employee Perspectives on Health Care: Voice of
the Consumer,”
(http://www.watsonwyatt.com/us/research/resrender.asp?id=2007-US-0094&page=1
) was conducted in January 2007. A total of 2,099 randomly selected workers
participated in the survey. All respondents were full-time U.S. employees
of large, nongovernmental companies who participate in their
employer-sponsored health plan. The survey’s margin of error is plus or
minus 2.1 percentage points for a 95 percent level of confidence.

About Watson Wyatt Worldwide

Watson Wyatt (NYSE: WW) is the trusted business partner to the world’s
leading organizations on people and financial issues. The firm’s global
services include: managing the cost and effectiveness of employee benefit
programs; developing attraction, retention and reward strategies; advising
pension plan sponsors and other institutions on optimal investment
strategies; providing strategic and financial advice to insurance and
financial services companies; and delivering related technology,
outsourcing and data services. Watson Wyatt has 6,000 associates in 30
countries and is located on the Web at http://www.watsonwyatt.com/.

Contact

Ed Emerman, +1(609)452-5967, eemerman[at]eaglepr.com
Emily Rieger, +1(703)258-7634, emily.rieger[at]watsonwyatt.com