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Workers Pay More for Health Care as Companies Shift Burden, Survey Finds

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A majority of Americans still get their coverage from the employer market, while the state health insurance exchanges continue to struggle. Analysis by the Kaiser Family Foundation shows that the share of employers offering coverage remained steady this year and the cost of premiums for health plans remained largely unchanged. However, a deeper look into the figures demonstrates that some trends are currently evolving, the most notably of which being that workers are continuing to pay an even larger portion of the medical bills. For the average American worker, the moderate rise in costs creates a more significant impact.

A couple of highlights from the survey illustrates the evolving trends in the insurance industry.

Slow Rise in Premiums

Average family premiums rose an average of 3 percent, similar to the increase in workers’ wage. Despite the price increase, this continues a significant slowdown, with prices increasing 63 percent from 2001 to 2006 versus 20 percent over the last five years. Though there is a chance that the slowdown will be short lived and as the economy begins to heat up, the trend could begin to reverse.

Networks Shrinking

Companies are continuing to opt for more restrictive plans that offer less choices for their employees. While employees are still covered if they go to a doctor or hospital that does not belong to their network, they still have to pay more to go outside the plan’s network. Though as the economy remains sluggish, employers look for methods to contain and predict costs, which they are better enabled via restrictive plans.

Employers Staying Put

Also, the survey found that the employer health coverage market remains strong despite predictions that the health care law would greatly affect its future. Also, there is little evidence that companies are cutting workers’ hours to avoid being required to offer full-time workers health insurance.

With the cost of health continuing to creep more into the wallets of average Americans, the impetus to reform value of healthcare continues to strengthen. While hospitals attempt to lower costs and improve outcomes via movements away from fee for service and other incomplete models, its important that the direct cost to patients is not missed and the insurance industry is also reformed properly and in alignment with the rest of the healthcare initiatives.

Article link: http://www.nytimes.com/2016/09/15/business/health-insurance-analysis-kaiser.html?rref=collection%2Fsectioncollection%2Fhealth&action=click&contentCollection=health&region=rank&module=package&version=highlights&contentPlacement=6&pgtype=sectionfront&_r=0

3 thoughts on “Workers Pay More for Health Care as Companies Shift Burden, Survey Finds

  1. I found this post particularly interesting, thanks for sharing. We actually discussed this phenomenon – the shift in the burden of health care costs from employers to employees – in my health economics class this past summer. In addition to the various trends you discussed, the economics of healthcare suggest that employees are willing to accept health coverage in exchange for wages (to an extent). Therefore, the employer mandate for companies of a certain size does not necessarily reduce the demand for labor or the willingness of employees to supply it. Although workers bearing the cost of health care may be precarious in its own right, a potential silver lining is that the economics of policies such as the employer mandate may not pose as much of a threat to employment as some critics have suggested.

  2. Definitely an interesting and very concerning finding. As some insurance plans hurtle headlong into the high out-of-pocket world, consumers are increasingly facing financial disincentives to seek care in general. There’s an increasing body of evidence that people are very poor at discerning what type of care is high- vs. low-value. As a result, as their deductibles rise, people tend to indiscriminately skimp on seeking care, including the very important preventive services that avoid more-expensive interventions later on.

    Meanwhile, raising people’s deductibles may not have a material impact on utilization and cost from truly expensive acute care (e.g. catastrophic trauma) or chronic diseases, the sources that are really moving the needle on healthcare costs. Higher out-of-pocket costs may therefore be harming consumers’ health while not addressing the underlying reasons for our expensive healthcare.

  3. Great post! This reminds me of a class discussion last week where the data could be read in multiple ways when examined in more detail. I think the biggest thing I took from this is how little impact health care reform has had. Also, I find your fact of health plans getting more restrictive very concerning, and I wonder what will happen to worker-paid portion of the health care as less and less physicians are covered in network? Will this cause workers expenses to sky rocket?

    Thanks for bringing up this data!

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