Workers saw a modest rise in the average cost of employer-sponsored health insurance this year, but they’re probably not overwhelmed with relief.
Coverage costs still are climbing faster than wages. That means, in many cases, that a bigger portion of the average paycheck is sliced off for insurance instead of being deposited into employee bank accounts.
Annual premiums for employer-sponsored family coverage climbed nearly 4 percent this year to top $16,000 for the first time, according to a survey by the Kaiser Family Foundation released Tuesday.
The cost of single coverage rose almost 5 percent. Those are smaller increases than the spikes of 9 percent for family coverage and 8 percent for single recorded in 2011. But this year’s increases top the average 1.8 percent rise in worker wages.
Plus, more companies are giving their employees coverage with a high deductible. Those plans require a patient to pay more out of pocket for things such as blood tests or MRIs before coverage starts. Coupled with the growing cost of coverage, that means many employees are likely paying more for insurance that covers less.
While health care costs have generally grown more moderately since the Great Recession eased, the average worker still feels the pain of paying more, said Drew Altman, CEO of the nonprofit Kaiser Family Foundation, which conducts the survey on coverage costs with the Health Research and Educational Trust.
“Their costs are going up, their cost-sharing is going up, wages are flat and inflation is much lower,” Altman said.
Employer-sponsored health insurance is the most common form of coverage in the United States. Employers typically cover most of the health insurance bill for their workers, and the actual change a worker sees in health insurance costs can vary greatly.
Some employers absorb cost hikes for their workers. Rate changes also depend on where the employee lives, the coverage he or she has and the size of the employer. Employees of smaller companies tend to see bigger cost fluctuations in part because those businesses have less leverage for rate negotiations.
Smaller employers also are turning more to high-deductible plans to help control insurance cost growth. These plans can cost the employer less by shifting more of the expense to the employee.
More than half of companies with fewer than 200 employees offered insurance with an annual deductible of $1,000 or greater this year for single coverage, according to the Kaiser survey.
That’s up from 16 percent in 2006.
Kaiser’s study doesn’t make forecasts about 2014, but lead author Gary Claxton said premium increases will likely be moderate next year, too. Altman, Kaiser’s CEO, said the cost increases aren’t big enough to force employers to make big changes in the coverage they offer.
“There really is no reason for employers to be radically whacking away at health coverage or health benefits in a slow health care cost environment like this,” he said.
But expect high-deductible plans to grow. A total of 38 percent of all workers with single coverage have a deductible of at least $1,000 this year. That compares with 10 percent in 2006.
These deductibles can help employers avoid an overhaul-mandated tax on expensive plans that starts in 2018, said Paul Fronstin, an economist with the nonprofit Employee Benefit Research Institute who wasn’t involved in the Kaiser study.
