Phil Galewitz

Study: Job-based health insurance costs up 4 percent this year

Health insurance costs for Americans who get their coverage through work continued a relentless march upward with average family premiums rising 4 percent to $21,342 this year, according to a study published Oct. 8. The annual survey by Kaiser Family Foundation found workers on average are paying nearly $5,600 this year toward family coverage, up from about $4,000 in 2010 and $1,600 in 2000. (Kaiser Health News is an editorially independent program of Kaiser Family Foundation.) While health insurance costs rose a modest amount in 2020, as has been the trend in recent years, they soared 55 percent in the past decade — more than twice the pace of inflation and wages. About 157 million Americans rely on employer-sponsored coverage — far more than any other type of coverage, including Medicare, Medicaid and individually purchased insurance on the Affordable Care Act exchanges. More than half of employers provide insurance to at least some workers. “Conducted partly before the pandemic, our survey shows the burden of health costs on workers remains high, though not getting dramatically worse,” Drew Altman, KFF’s CEO, said in a statement. “Things may look different moving forward as employers grapple with the economic and health upheaval sparked by the pandemic.” The survey was conducted from January to July as the coronavirus pandemic took hold and upended the nation’s economy. Many of the details of the employers’ plans that the researchers examined were set before the virus hit. Since 2012, the cost of family coverage has increased 3 percent to 5 percent annually. It’s been more than 15 years since these costs were rising at double-digit rates. Employers help shield workers from much of the cost of their health insurance premiums, though employees often feel the impact via higher deductibles, copayments and lower wages. On average, workers pay 17 percent of the premium for single coverage and 27 percent for family coverage, the survey found. Workers at smaller companies pay 35 percent of the premium for family coverage, compared with 24 percent for larger companies, the survey found. The average annual deductible for single coverage is now $1,644, up 25 percent in the past five years and 79 percent in the past decade. Workers with coverage are exposed to higher costs when using the hospital since 65 percent have coinsurance, which means they are responsible for a fixed share of the charge, and 13 percent contribute a copayment, or fixed fee per visit or service. The average coinsurance for hospital admission is 20 percent and average copayment is $311 per hospital admission. Workers are protected for catastrophic costs through limits set on their out-of-pocket spending in provider networks, although those amounts vary by employer: 11 percent face a maximum of less than $2,000, while 18 percent are in a plan with a maximum of $6,000 or more. The study also noted that large employers have made it easier for workers to access care by adopting coverage for telemedicine in recent years. Nearly 9 in 10 companies that have 200 or more workers and offer insurance covered these medical appointments done via telephone or computer this year, up from fewer than 3 in 10 in 2015, according to the research. During the pandemic, telemedicine usage has increased markedly as people sought care from the safety of their home. The KFF study is based on a telephone survey of 1,765 randomly selected nonfederal public and private employers with three or more workers from January to July. Kaiser Health News is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Analysis: Competition suffers from UnitedHealth ACA exchange exit

Editor’s note: The first paragraph of this story has been modified slightly to reflect UnitedHealth’s official announcement April 19 that it is existing most Affordable Care Act exchanges next year. An analysis released April 18 forecasts that more than 1 million consumers would be left with a single health plan option after UnitedHealth Group followed through on its threat to quit the health insurance marketplaces in 2017. A UnitedHealth pullout would be felt most in several states, generally in the South and Midwest, where consumers would be left with little choice of plans, the Kaiser Family Foundation reported. (KHN is an editorially independent program of the foundation.) In most of the 34 states where UnitedHealth operates this year, though, the effect would be modest for premiums and the number of plan options, Kaiser said. Kaiser’s analysis was made public a day before UnitedHealth Group, the insurer’s parent, is expected to announce 2017 plans for the Affordable Care Act’s marketplaces that provide coverage to individuals who shop for their own health insurance. In the past week, state officials confirmed UnitedHealth was withdrawing from marketplaces in Arkansas and Michigan and partially leaving Georgia. In Atlanta and Chicago, a new UnitedHealthcare subsidiary, Harken Health, began operating this year and is expected to remain. Last year, UnitedHealth said it was losing hundreds of millions of dollars on the Obamacare plans and would decide its future participation by mid-2016. Health plans need to begin notifying states by May whether they plan to sell in marketplaces next year. More than one in four counties where UnitedHealth participates nationally would see a drop from two insurers to one if the company exits and isn’t replaced by a new entrant, and a similar number would go from having three insurers to two, the Kaiser analysis found. In total, 1.8 million enrollees would go from having a choice of three insurers to two, and another 1.1 million would go from having a choice of two insurers to one, the report said. A UnitedHealth withdrawal would leave marketplace enrollees in Kansas and Oklahoma with only one insurer if another company does not move in, Kaiser said. Nationally, UnitedHealth’s participation on the exchanges had a relatively small effect on average premiums, based on Kaiser’s analysis of 2016 insurer premiums. The company was less likely to offer one of the lowest-cost silver plans, where most enrollees sign up. When it did offer a low-cost option, its pricing was often close to its competitors. As a result, the weighted average premium for a benchmark silver-level plan would have been about 1 percent higher had United not participated in 2016. Federal subsidies in the marketplaces are based on the second-lowest silver premium. Benjamin Wakana, a spokesman for the Centers for Medicare & Medicaid Services, said the government expects insurers to make adjustments in entering and exiting states. “The marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer. That data shows that the future of the marketplace remains strong.” Kaiser Health News is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.  
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