Employees pay more for less health care
Total cost of premiums didn't rise much this year, but employees are paying a higher percentage and seeing cuts in benefits.
Chalk up another budget category where you're paying more and getting less: employer-provided health care.
A new survey shows that workers are paying a higher percentage of their health insurance premiums as benefits are reduced and co-payments and deductibles rise.
The 2010 Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research & Educational Trust found that workers are paying 19% of the cost of individual insurance and 30% of the cost of family insurance, the highest rate in the 12 years the survey has been done. Last year, workers paid 17% of the cost of individual coverage and 27% of the cost of family coverage. Post continues after video.
Kaiser president and CEO Drew Altman explained the changing insurance landscape for workers in a news release:
With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles and other cost-sharing. This may be helping to stem the rapid rise in premiums that we saw in the early 2000s, but it also means employer coverage is less comprehensive. From a consumer perspective, the cost of health insurance just keeps going up faster than wages.
Since 2005, according to the survey:
- Health insurance premiums have risen 27%.
- The amount employees pay has gone up 47%.
- Wages have increased 18%.
- The Consumer Price Index has risen 12%.
The survey was conducted between January and May, so the results were not affected by health care reform, which has not yet gone into effect for employer-provided policies. It's still unclear what the economic impact of reform will be for those who receive health insurance through their employers.
Forsingle workers, the total cost of premiums increased 5%, to $5,059 annually. The worker's share went up from $779 in 2009 to $899 in 2010, meaning employees paid more than half the increased annual cost of $225.
Forfamily plans, premiums rose 3%, to $13,770, with workers paying $3,997, up from $3,515 last year.
Of course, those with employer-provided health insurance are still paying much less for more coverage than self-employed people and others who buy their own insurance. An individual policy can easily cost $2,500 to $5,000 a year for one person with a $5,000 deductible. And that's for a healthy person who can get insurance.
Among other findings:
- 30% of employers that offer coverage reported either reducing benefits or increasing the amount employees pay in deductibles, co-payments and other charges.
- 27% of employees with health benefits have a deductible of at least $1,000, up from 22% last year. At firms with fewer than 200 employees, nearly half have deductibles of at least $1,000.
- 13% of workers covered by employer-provided insurance have high-deductible plans with health savings accounts, up 8% from last year.
- 74% of employers offer one or more wellness programs.
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