Study shows employers shifting more medical costs to workers

Those out-of-pocket increases, paid before insurance kicks in, mean patients are responsible for more of the cost when they get care, according to a report on employer-sponsored health plans by the research groups Kaiser Family Foundation and the Health Research & Educational Trust. Since 2010, the workers’ share of premiums have risen more than twice as fast as wages. The survey found that premiums rose about 4 percent.

The premium slowdown is all but invisible to consumers, Altman says, because their own costs have risen so dramatically.

And the new report shows that premium growth remained modest in 2015. It’s the out-of-pocket costs – the co-payments, co-insurance and deductibles they must hand over at the pharmacy or doctor’s office or after a hospital stay. Some experts liken that shift to the move from defined-benefit pensions to defined-contribution plans like 401Ks. The 2015 survey included nearly 2,000 interviews with non-federal public and private firms.

“It’s a hard decision for employers to increase cost-sharing for their employees”, Umland said.

That trend isn’t being driven only by the minority of employees with lousy coverage.

The relatively modest increase in premiums over the past decade stems partly from an increase in deductibles for most health plans. Since 2005, premiums have grown an average of only 5% each year, compared to an 11% annual rate between 1999 and 2005.

The survey also finds that 81 percent of covered workers are in plans with a general annual deductible, which average $1,318 for single coverage this year.

“Deductibles are a big problem for consumers”, said Peter Lee, executive director of Covered California, the largest state marketplace in the country. That’s up from 55 percent in 2006 and 70 percent in 2010. Among those surveyed, 1,997 responded to the full survey and 1,194 responded to a single question about offering coverage.

Smaller businesses, with less than 200 employees, have higher deductibles – on average $1,836. “When out-of-pocket costs are going up at a time when wages are flat, the pain level is still pretty high”.

This year, employers with at least 100 full-time workers will have to provide benefits or pay a penalty. The employer mandate extends to companies with 50 or more fulltime equivalent workers next year. Worker earnings, by contrast, rose just 10 percent over that period, according to Kaiser’s analysis of Bureau of Labor Statistics data.

But consumers are still shelling out a lot more than they did only a few years ago.

In addition, 4 percent said they reduced the number of fulltime workers they planned to hire because of the cost of health insurance.

Cadillac tax, starting in 2018. Although some members of Congress, including Connecticut U.S. Rep. Joe Courtney, D-2 District, are pushing to eliminate the tax, as it stands it would require employers to pay a 40 percent tax on any insurance plan costs that exceed set limits.

Premiums for single coverage hit $6,251, up from $4,024 a decade ago.

Paducah, Kentucky, resident Emmett Krall says the annual deductible of $3,500 on his employer-sponsored health insurance makes him think about cost more than he wants to, especially since his 10-year-old son was diagnosed with Type 1 diabetes previous year .

This one workplace mirrors a national trend in which workers are finding themselves responsible to a greater portion of their health insurance costs.

People are paying one-third more at the doctor, on average, than they were in 2006.