Higher Deductibles, Growing Premiums Transfer Costs to Workers

 Having health coverage through your employer may not mean quite what it used to. Two recent surveys show costs passed on to workers continue to rise at both large and small firms. Strikingly, percentage increases are especially acute for lower wage employees, increasing the overall percentage of family income consumed by health needs.

The 2013 Towers Watson / National Business Group on Health benefits survey showed large employers are moving aggressively to control costs, with only one-quarter of 583 respondents saying they are very confident they will even offer health coverage a decade from now.

The employee share of health care premiums rose 8.7 percent year-over-year from 2012 to 2013, with employees overall paying 42 percent more for care than they did five years previously. “Likewise, out-of-pocket expenses at the point of care continue to rise, up by 15 percent over the last two years, from 15.9% to 18.4%,” the report said, noting that more than 80 percent of companies surveyed plan to continue increasing the premium share paid by workers over the next three years.

Over the last decade, the survey showed drastic increases in the prevalence of account based health plans. Now two-thirds of respondents offer some variation of the approach, which combine health savings accounts with increased deductibles that employees are required to pay. And increasingly, to incentivize participation, companies are offering some form of price, quality, and decision support tools for their employees.

For more information here

The same trends were noted in a Kaiser Family Foundation/ Health Educational Trust survey last September, which found annual premiums for employer-sponsored family coverage were up 4 percent to $15,745. In the ten years since 2002, the survey found, premiums had nearly doubled, growing three times as fast as wages and more than triple the rate of inflation.

And, cruelly, the bite on lower-wage workers was more aggressive than that on higher-wage workers.  “Workers at lower-wage firms on average pay $1,000 more each year out of their paychecks for family coverage than workers at higher-wage firms ($4,988 and $3,968, respectively),” Kaiser Family Foundation said in a press release.

Additionally, “workers at lower-wage firms are also more likely to face high deductibles than those at higher-wage firms. Specifically, 44 percent of covered workers at firms with many low-wage workers face an annual deductible of $1,000 or more, compared with 29 percent of those at firms with many high-wage workers. Across all employers, a third of covered workers (34 percent) face a deductible of that size, including 14 percent with deductibles of at least $2,000 annually,” Kaiser noted.

More information here.