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Health insurance concerns linger for many

Health Care and Health Insurance
by Chris Merkel
Health insurance concerns linger for many
Health insurance concerns linger for many

Costs for health care and insurance coverage have been a major focus for consumers, business leaders, advocacy groups and government officials for years now. As has been the case for decades, much of those insurance costs have been covered by employers as part of benefits offerings for millions of workers and their families. But more recently, the share of those expenses has shifted back toward workers as a means of keeping costs down for companies.

More than half of all working-age Americans - those under 65 - received their health insurance from an employer in 2017, about 60 million workers in total, according to new analysis from the State Health Access Data Assistance at the University of Minnesota, as part of its Medical Expenditure Panel Survey. However, only about 73.5 percent of eligible workers actually take their employers up on that coverage.

Digging into the numbers
Fewer than half of all businesses - 46.9 percent of companies - offered such coverage, though that number was up 3.5 percent from 2016's share, the report said. This increase, however, did not significantly impact the number of people who were made eligible for employer-provided coverage.

Moreover, the average annual premium for single-person coverage rose 4.4 percent on an annual basis, to $6,368. That growth rate, which added some $267 in premium costs (a little more than $5 per week), was the largest observed in the national market since 2014. Likewise, average premiums for family coverage ticked up 5.5 percent, to a total of $18,687, nearly $1,000 more than it was last year (a little less than $19 more per week).

The costs for consumers didn't end there, though: Deductibles spiked 6.6 percent for single-person coverage (to more than $1,800 on average) and 10.7 percent for families (to nearly $3,400), the report said.

"Employer-sponsored insurance continues to be the backbone of the insurance coverage system in the United States, covering more than half the population," the authors of the report wrote. "The level of financial protection offered by [employer-sponsored insurance] has continued to decline steadily in the form of higher deductibles; however, for the first time in recent years this decrease in financial protection was accompanied by an acceleration of the growth in premiums."

The cost of health insurance continues to rise - sharply - for consumers and employers alike.The cost of health insurance continues to rise - sharply - for consumers and employers alike.

With higher premiums and deductibles coming simultaneously these days, it's worth noting that employers are still paying a good portion of the above coverage costs, according to new data the Kaiser Family Foundation. While its calculations for both single-person and family plans were slightly different from the SHADA's (by a few hundred dollars in both cases) it noted that the average worker contribution for the former was only about $1,200, and more than $5,500 for families, indicating that companies are still carrying a significant chunk of those costs.

Unfortunately, while premium increases are more or less in line with both the increase in worker wages and inflation over the past year, those coverage costs have certainly not aligned in the same way over the past decade, the report said. Even with slower increases in premiums since the passage of the Patient Protection and Affordable Care Act, premiums have jumped 55 percent since 2008, while worker pay has only increased at less than half that speed (26 percent) and inflation has only grown 17 percent.

Furthermore, 85 percent of workers have at least some deductible associated with their plans today, up from just 59 percent 10 years ago, and those costs have grown by a whopping 212 percent over that period, the report said. Indeed, more than 1 in 4 employees have deductibles of more than $2,000, up from 15 percent in 2013.

How is it connected?
Meanwhile, a new report from the Economic Policy Institute notes that while both employers and workers are facing more pressure as a result of sharply rising health care costs, that issue is actually what's holding back more widespread economic prosperity. The EPI found that companies are spending more on their coverage, just like their employees, but the quality of that insurance coverage or the care it helps provide to workers hasn't improved commensurately.

That, in turn, makes it difficult for companies to both manage rising costs - which leads to the prevalence of those high-deductible plans in the first place - while also making it harder for companies to increase wages, the report said. However, it's not as though insurance companies are increasing costs for no reason; over the past decade, the cost of pharmaceuticals and actual health care itself has been on the rise, as have physician salaries thanks to increased demand for coverage.

Indeed, from 2006 to 2016, out-of-pocket costs paid by consumers have risen more sharply (53.5 percent) than the amount insurers have paid for coverage (48.5 percent), the report said. Overall, national health care spending as a share of the gross domestic product jumped to 17.4 percent in 2016, more than double what it was in 1979, despite the fact that many other similarly industrialized countries pay far less and get significantly better health outcomes despite the expenditure.

What's being done?
These issues, being so significant for both the average American and businesses large and small, have attracted a lot of attention in Washington, and one of the best courses for correcting the problems seems to be focused on addressing drug prices, according to The New York Times. President Donald Trump recently signed a bill that would allow pharmacists to cut their own drug costs by paying the "cash price," which is often cheaper than going through an insurance company.

Previously, pharmacists were not allowed to share any information about how prescription medications may be priced, and those "gag orders" are often put in place by companies with a vested interest in wringing as much money out of every transaction as possible, The Times noted. These changes came - through two separate bills - for gag orders that applied to both private health insurance plans and Medicare.

"Insurance is intended to save consumers money," Sen. Susan Collins, a Republican representing Maine who introduced the private insurance-based bill, said in announcing the bills being signed into law. "Gag clauses do the opposite. They prevent pharmacists from telling patients how to pay the lowest possible price for their prescription drugs."

The bills also included provisions that would help keep companies from delaying the production of certain types of generic drugs, which would likewise keep costs artificially high for consumers, the report said. However, lawmakers and advocates alike still say much more needs to be done to keep drug costs down going forward.

These issues are certainly something for insurers, employers and consumers to keep a close eye on as time goes on, because any legislative changes could end up having a major impact on coverage costs going forward. At the same time, though, insurers would be wise to make sure they are making it clear to policyholders and employers alike why and how cost increases will affect them even as premiums and deductibles continue their predictable increases over the next year and beyond. That kind of outreach count go a long way toward ensuring satisfaction with coverage.



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