Published: Thu, September 15, 2016
Economy | By Melissa Porter

Workers pay more for health care as companies shift burden, survey finds

Workers pay more for health care as companies shift burden, survey finds

Overall, health insurance premiums for a family covered by an employer health plan rose an average 3 percent this year to $18,142.

The rate of increase is greater than the 2.5 percent pace of wage growth, and inflation of 1.1 percent, but marks the continuation of "historically slow rates" for health insurance, said Drew Altman, president of the Kaiser Family Foundation, in a statement. Workers paid, on average, 18 percent of the premium for individual coverage and 30 percent for family coverage.

More workers are in plans that pair high deductibles with health savings accounts that are dedicated to paying medical costs, according to the Kaiser study, with about 29 percent in such plans in 2016, compared to 24 percent a year ago.

In 2016, 29 percent of all workers were in such plans, up from 20 percent in 2014, while a shrinking share of workers (48 percent in 2016, down from 58 percent in 2014) are enrolled in Preferred Provider Organization (PPO) plans, which have higher-than-average premiums. But just 2 percent said they shifted or planned to shift workers from full-time to part-time to avoid having to offer them coverage. That might make companies more comfortable with sending their employees out to shop for something as complicated as health care.

"Your typical employer is using everything in the toolkit to control their premiums", he says. Kaiser foundation analysts suggested that the movement of workers into higher-deductible plans reduced the rate of premium growth by half a percentage point this year and another half-point last year. For the first time, the survey found that more than half of all covered workers face deductibles of at least $1,000 a year for individual coverage.

The Kaiser study, based on a survey completed by more than 1,900 firms, looks at how about 150 million people in the US get their health coverage. The effect of those high deductibles is mediated in some plans by employer contributions to health savings accounts. After factoring this contributions, the share of covered workers with deductibles of at least $1,000 is 38 percent, according to the survey.

Employers still pay about 70 percent of workers' family premiums and 82 percent of single premiums, the report said.

A separate study released earlier this week found a markedly different pattern of health care use between people on high-deductible plans, compared with traditional plans. That's the amount usually taken out of a paycheck before taxes. Some 96% of companies with at least 100 workers and 89% with at least 50 workers provide coverage. This share is similar for large and small firms. Almost two thirds (64 percent) of large employers offering health benefits say that they conducted an analysis to determine if any of their plans would exceed the Cadillac tax thresholds, and a quarter (27 percent) of this group say their largest plan would do so.

"Deductibles are difficult for people because the full cost can sometimes be hard to pay", said Gary Claxton, who oversees the Kaiser survey.

Health risk assessments. Most large firms offering health benefits (59 percent) offer to give workers a health risk assessment that asks questions about their medical history, health status and lifestyle.

"Raising your cost-sharing is one way to keep premiums in line", Claxton said. Only 53% of companies with three to 49 staffers offer benefits. Most (59 percent) of these firms offer financial incentives for undergoing the screenings, and some (14 percent) tie the incentives to meeting specific outcomes such as a targeted body mass index (BMI) or cholesterol level.

But perhaps the most notable trend is the "shift in what insurance is for most Americans, from more comprehensive to skimpier coverage with more skin in the game", according to Altman.

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