Thursday, September 2, 2010

qotd: Should we leave employers in charge of health benefits?

The Kaiser Family Foundation
and Health Research and Educational Trust
September 2, 2010
Employer Health Benefits

The average annual premiums for employer-sponsored health insurance in 2010 are $5,049 for single coverage and $13,770 for family coverage.

Twenty percent of covered workers are in plans with an annual total premium for family coverage of at least $16,524 (120% of the average premium).

Covered workers on average contribute 19% of the total premium for single coverage (up from 17% in 2009) and 30% for family coverage (up from 27% in 2009).

Fifty-one percent of workers with family coverage pay more than 25% of the total premium.

Among workers with a deductible, the average general annual deductible for single coverage is $675 for workers in PPOs, $601 for workers in HMOs, $1,048 for workers in POS plans, and $1,903 for workers in HDHP/SOs.

For the last two years we have asked employers about changes that they made to their health benefits in response to the poor economy. Among large firms (200 or more workers), 38% reported reducing the scope of benefits or increasing cost sharing, up from 22% in 2009, while 36% reported increasing their workers' premium share, up from 22% in 2009.

Tracking whether and how worker out-of-pocket costs continue to grow will be an important focus for the survey over the next few years. The slow economic recovery and continuing high unemployment suggests that this trend of increasing out-of-pocket costs will persist, as workers have little clout to demand better benefits or lower costs in the current labor environment.

Full report (226 pages):

Comment:  By design, the Patient Protection and Affordable Care Act (PPACA) will have the least impact on employer-sponsored health plans. Congress did not want to disturb these plans that seemed to be working reasonably well, in that they covered more of us than all other programs, and were already generously funded with employer contributions. This annual report on employer health benefits is even more relevant this year since Congress, through PPACA, has deemed that we will be living with these plans for decades to come.

The report brings us terrible news. Premiums continue to rise at intolerable rates, and more of the premium costs are being shifted to the employees. Employers also are requiring greater cost sharing on the part of their employees, especially in the form of higher deductibles. Employees are paying more for less protection.

With the poor economy employees need greater relief, yet employers are seeking relief for themselves by placing an even greater financial burden on their own employees.

This is a one-way trend. Employers will continue to seek ways to reduce the costs of their health benefit programs, and an ever increasing amount of the burden will be borne by the employees. Should we really be leaving these decisions in the hands of the employers?

Drew Altman, president and CEO of the Kaiser Family Foundation, said, "The new law helps a lot of people in a lot of ways... but in general it left employer-based coverage alone. That is what the politics of health care dictated and what the American people asked for." (Kaiser Health News, Sep 2)

If Americans really prefer their employer-sponsored plans, then why are they so relieved when they get to go on Medicare? How much more burden will Americans have to bear before they change the politics and start demanding Medicare for all?

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