The New York Times
November 22, 2004
Growth Rate in Health Cost to Employers Slowed in ’04
By Reed Abelson
After years of double-digit cost increases, the rate of growth in what employers pay for employee health insurance slowed significantly this year, according to an annual survey to be released today.
The average employer cost for health benefits for an employee rose 7.5 percent in 2004, to $6,679, the lowest increase since 1999 in a survey of about 3,000 employers by Mercer Human Resource Consulting.
But this slowing rate was largely the result of employers shifting more of the cost onto their employees and changing the kinds of plans they offer, said Barry Schilmeister, a senior health care consultant for Mercer.
“What we’ve seen for a couple of years running now is that employers have made very significant changes to their programs to cut three to four points off that inflation rate,” he said.
The overall growth in health care costs remains a concern, Mr.Schilmeister said. “Underneath it all, while general inflation is 2 percent, medical inflation continues to be 10-plus percent,” he said. “We still have a significant problem to deal with.”
Comment: Rather than being good news for employers, this is terrible news for employees, and for the rest of us. Health care costs continue to increase, but those costs are being shifted from employers and insurers to individuals, especially those with greater health care needs. Having health insurance no longer means that you have protection against financial hardship in the event of significant medical need.
It’s not that we don’t have enough money. We have plenty. We are already spending enough to pay for comprehensive care for everyone. The problem is that we are slowly shifting away from the insurance principle wherein the many who are healthy contribute a modest amount to pay for the care of the few who are sick.
Up to the present, we have refused to enact policies that would address cost issues by reducing the profound waste in our system. At the same time we are adopting policies that will hold down the modest amounts contributed by the many who are healthy, that is, we are holding down premiums paid for coverage. This means that insurance will offer fewer benefits and will increase cost sharing. Thus, by default, we are making the few who are sick pay even greater amounts for their care.
Where is our social contract of solidarity? I guess we can cross that one off of our lists as we give thanks tomorrow. No sense wasting our “prayer capital” on that one.