Healthcare Matters

Annual premiums for employer-sponsored family health coverage reached $15,745 this year, up 4 percent from last year, with workers on average paying $4,316 toward the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2012 Employer Health Benefits Survey released today.  That’s up 4% over the last year.

This year’s premium increase is moderate by historical standards, but outpaced the growth in workers’ wages (1.7 percent) and general inflation (2.3 percent).  Since 2002, premiums have increased 97 percent, three times as fast as wages (33 percent) and inflation (28 percent).

“In terms of employee insurance costs, this year’s 4 percent increase qualifies as a good year, but it still takes a growing bite out of middle-class workers’ wages, which have been flat or falling in real terms,” Kaiser President and CEO Drew Altman, Ph.D. said.

The 14th annual Kaiser/HRET survey of more than 2,000 small and large employers reveals significant differences in the benefits and worker contributions toward family premiums between firms with many lower-wage workers (at least 35 percent of workers earn $24,000 or less a year) and firms with many higher-wage workers (at least 35 percent of their workers earn $55,000 or more a year). 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 ($4,977 and $3,968, respectively).  This occurs even though the firms with many lower-wage workers on average pay less in total premiums for family coverage than firms with many higher-wage workers ($14,694 and $16,427, respectively). In addition, 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.

“This year’s survey suggests that working families at the low end of the wage scale face significant out of pocket costs for coverage,” said study lead author Gary Claxton, a Kaiser Vice President and director of the Foundation’s Health Care Marketplace Project.  ”Firms with many lower-wage workers ask employees to pay more out of pocket than firms with many higher-wage workers even though the coverage itself tends to be less comprehensive.”

Other findings from the study include:

• Worker-only coverage. Premiums for worker-only health coverage increased 3 percent in 2012 to reach $5,615 annually.  Workers on average pay $951 toward this coverage.

• Offer rate.  This year, 61 percent of firms offer health benefits to their workers – statistically unchanged from last year.

• Cost-sharing for office visits, emergency care and drugs.  Covered workers facing co-payments for in-network physician office visits on average pay $23 for primary care and $33 for specialty care.  For emergency-room visits, average co-pays are $118.  For drug plans with three or more tiers, average co-pays are $10 for generic drugs, $29 for preferred brand-name drugs, $51 for non-preferred brand-name drugs, and $79 for specialty drugs.

• Domestic partner benefits.  In 2012, 31 percent of employers offer health benefits to same-sex domestic partners, up from 21 percent three years earlier.  This year 37 percent of firms offer such benefits to unmarried opposite-sex partners, up from 31 percent in 2009.

• Flexible Spending Accounts and Pre-Tax Premiums.  Large employers are more likely than small ones to allow workers to pay their share of premiums with pre-tax income (91 percent, compared to 41 percent) and to contribute pre-tax dollars to Flexible Spending Accounts (76 percent, compared to 17 percent).

About the Survey: Now in its 14th year, the survey is a joint project of the Kaiser Family Foundation and the Health Research & Educational Trust (HRET).  The survey was conducted between January and May of 2012 and included 3,326 randomly selected, non-federal public and private firms with three or more employees (2,121 of which responded to the full survey and 1,205 of which responded to a single question about offering coverage).

Source: PRNewswire

The US system of health insurance continues to rely on private insurance. And that makes sense, because the US has the highest health spending in the world – equivalent to 17.9% of its gross domestic product (GDP), or $8,362 per person. But it’s not all private – government spending is at $4,437 per person, only behind Luxembourg, Monaco and Norway. Less than 50% of all US health spending is by private companies – 46.9%. But the US has the highest rate for health insurance in the world – 67.8% of all private spending. Which means the rest comes from out of pocket expenses (i.e. we pay for it as we go). Cuba has some of the highest government health spending in the world – 91.5%– and that results in 67.23 doctors per 10,000 population, the highest of any major country. That’s beaten by the UK on nurses – it has 101 per 10,000 people, only behind countries like Norway and Germany. The UK also spends $3,480 per year on health – 9.6% of health spending – with government spending making up 83.9% of all health spending.

Source: UK Guardian

None of these data have been comparatively analyzed using outcomes. With “big data” solutions upon us, there is some extraordinary learning that’s going to take place over the next several years.

—Tom Finn