By Drew Altman, Ph.D.
Kaiser Family Foundation, September 27, 2011
Premiums for employer-provided health insurance, where 150 million Americans get their coverage, jumped 9% in 2011 while workers’ wages grew just 2%, according to our annual employer survey. The average family policy now costs more than $15,000 per year, more than the cost of a Chevy Aveo or a Ford Fiesta. Since we began doing this survey thirteen years ago, worker contributions to premiums have increased 168%, wages 50%, and inflation 38%.
The “Supercommittee” created by the recent debt reduction legislation will be looking for more ways to save money in government health programs, but the focus in Washington is almost entirely on cutting government spending, not curbing rising health costs overall. Employers will be left to their own devices to try to keep health care costs down. They have never been very successful at this, nor have private health insurance companies. While the conventional wisdom is that private insurance does a better job of controlling costs, the opposite is true. The Centers for Medicare and Medicaid Services (CMS) says that Medicare spending per enrollee grew at a much lower rate than private insurance between 1999 and 2009 (4.9% vs. 7.2% for comparable benefits).
In the short term, employers have few new tools to control premium increases. Employees will continue to see more high-deductible health plans, with and without tax-preferred savings accounts, and deductibles will get even larger. These plans have lower premiums because the big upfront deductible that people must pay before their insurance kicks in causes them to use fewer health services. The trend here is very clear, especially in firms with fewer than 200 employees where the percentage of workers in a plan with a deductible of $1,000 or more for single coverage has grown from 16% in 2006 to 50% today. Conservatives rail about Obamacare, but they may be winning more than they are losing; it is their vision of insurance with more “skin in the game” that is gradually taking over the marketplace because employers have no other way to control costs.
Health care groups are maneuvering with defense lobbyists and health provider groups are jockeying with beneficiary advocates about who will take the brunt of the hit from the Supercommittee. But one thing that should be clear is that reducing federal health spending is not the same thing as controlling health care costs; just ask the 150 million Americans and their employers who will be paying $15,000 when they buy a family policy this year.
http://www.kff.org/pullingittogether/rising_health_costs_federal.cfm
Summary of findings (8 pages):
http://ehbs.kff.org/pdf/8226.pdf
Comment:
By Don McCanne, MD
When the Affordable Care Act was drafted every effort was made to leave intact the largest source of health care coverage in America – employer-sponsored health plans. Most working families will have no other choices than the plans offered by their employers. How well are they working?
The average premium for an employer-sponsored family plan is now over $15,000, paid for by employee premium contributions and foregone wage increases. As if that weren’t bad enough, more of the direct costs of health care are being shifted to employees and their families, especially through larger deductibles.
The conservatives won the health care reform battle. Health care coverage for workers was left in the more expensive private market, and consumers are being empowered with the right to decline the health care that they need but can no longer afford because of the high out-of-pocket expenses.
Yesterday’s qotd message was on framing, demonstrating how the right has taken control of our cognitive processes by superimposing the moral worldview of individual responsibility, while bypassing logic. As proof, much of the bashing of single payer advocates is coming from the left. Even though liberals understand fully the logic of single payer, they are absorbed in the process of making the Affordable Care Act work. We’ve shown that it cannot ever accomplish the goals of universal coverage and affordability, yet they insist that this right-wing consumer/market approach will get us there through incremental steps, though incrementalism hasn’t achieved our ultimate goals in over a half century of trying.
Today I received an email message that went out to another list, sent by one of the most intelligent, dedicated, progressive individuals in the health care reform movement. The title of the message was, “Don McCanne is wrong Re: [hc4ac] US Last In Mortality Amenable to Health Care.” She wrote, “The vote on the ACA has occurred; opposing it on a daily basis does not get us closer to universal coverage or price controls or to single payer; nor does intoning single payer on a daily basis.”
So abandoning single payer and tweaking a model designed by the conservative Heritage Foundation will get us there? We certainly screwed up the framing on this one!