Thursday, September 11, 2014

You won't believe latest on employer health benefits

The most shocking thing about the Kaiser Family Foundation's 2014 report on employer health benefits may be the lack of shocking data.

The foundation,  which has been tracking health benefits since 1999,  reports that 2014 continues a period of  "historic moderation" in premium increases,  in the words of CEO Drew Altman.  The average premium for family coverage rose 3 percent,  to $16,834 a year,  with employers covering about $12,000 and employees about $4,800.

Altman and Kaiser VP Gary Claxton,  the study's lead author,  said Wednesday they know that talking about moderation clashes with the experience of many employees,  who are seeing out-of-pocket costs rise while wages stagnate.  And it contradicts some people's expectation that the Affordable Care Act would send rates through the roof.

"If you say that to an average person,  they may look at you like you're out of your mind,"  Altman told reporters.

Deductibles  --  the amount people are required to pay out of pocket before coverage kicks in  --  have been climbing steadily for the last few years.  Sometimes high-deductible plans are accompanied by a pre-tax savings account with employer contributions,  but the biggest recent growth has been in  "plain old vanilla high-deductible plans,"  Altman said.

Thirty-four percent of employees in small firms  (fewer than 200 employees)  and 11 percent of employees in larger companies have deductibles of at least $2,000 for an individual,  the report found.  That's up from 20 percent and 4 percent,  respectively,  in 2010.  Sixty-one percent of employees in small firms and 32 percent of those in large ones must cover at least $1,000 for an individual.  (Some preventive services are covered before the deductible is met,  as required by the ACA.)

"You've got both the ACA and market forces reinforcing each other on the issue of deductibles,"  Altman said.

The report,  done in partnership with the American Hospital Association's Health Research & Educational Trust, is based on a survey of more than 2,000 employers,  done between January and May.  Almost 150 million people are covered by employer-sponsored insurance.

While the Affordable Care Act is forcing changes in costs and coverage,  it also follows years of soaring costs for insurance and health care.  From 1999 to 2004,  for instance,  premiums increased 72 percent while average earnings rose 17 percent.  In the most recent five-year stretch,  premiums rose 26 percent while wages rose 11 percent.  Thus changes that feel extreme for workers  --  especially those whose plans are changing  --  can look modest in the historic context.

Of course,  the ACA is just starting to kick in.  And the health care market is very much in flux,  as my colleague Karen Garloch reported from this week's Carolinas HealthCare System board meeting.  As employers gear up for 2015 insurance enrollment this fall,  I'm working on a look at's happening locally and what lies ahead.  If you're willing to talk about your experience with a high-deductible plan in your workplace,  please get in touch  (my phone number and email are at right, below the photo).


Matt M said...

I wonder if you have any information about rising deductibles. All this information talks about "at least $2000." I am hearing anecdotal evidence of deductibles rising to the $5000 and $6000 range. If that is a trend, it could explain the moderate rises in premiums.

Anonymous said...

Matt M is spot on. Deductibles and out-of-pocket costs has skyrocketed as insurance carriers are forced to bring patients on with pre-existing conditions. We must repeal Obamacare!

Ann Doss Helms said...

Matt, I know those policies exist because I have one. They're not the norm, at least so far, but I don't know prevalence. I have to admit I've read the summary but not all of the full study; there may be a more detailed breakdown in there somewhere.

Anonymous said...

What about the consumer driven health plans? Generally higher deductible but a capped out of pocket max. Anyone out there done the deep dive on these new policies? The state has one thru BCBS.

Ann Doss Helms said...

Matt, I'm working my way through the full report. This link gives details and does indicate some very high deductibles, especially for family coverage through small employers.

Anonymous said...

I work for a national company employing over 250K. Being single, my deductible is $6000 with a family having a $10,000 deductible.

Anonymous said...

Walmart is the only company who employs even close to 250k in America ..

Anonymous said...

There is a bank or two that employs over 250,000 people.

$10,000 maximum out of pocket is real and that is $833 per month.
Who has that laying around?
Pretty well any visit beyond a yearly physical is straight out of pocket.

HSAs only cover 6500 as that is the maximum allowed by rule.

Insurance used to be a nice benefit at large corporations, but now it is garbage as profit rules and healthcare costs are passed down to the employees to protect profit. Of course the actual payout from the insurance company (actually the employer in most cases) to the provider is drastically less than what the employee has to pay out of pocket to the provider, since the employee doesn't have a contracted reduced pay schedule. No wonder there is a faltering economy since regular people have much less disposable income to spend on fueling the economy.

Thomas said...

Why do they write these cheery article before the employer mandate kicks in? A huge round of cancellation & premium increases is coming then. The Democrats have delay this until after the election to hide from the lies they told.