U.S. employers push increase in cost of healthcare onto workers

A new survey shows an average worker with a family plan pays nearly $4,000 a year, up 14% from 2009. Meanwhile, the average employer contribution to a family plan hasn’t increased at all.

By Noam N. Levey, Los Angeles Times

As employers struggle with rising healthcare costs and a sour economy, U.S. workers for the first time in at least a decade are being asked to shoulder the entire increase in the cost of health benefits on their own.

The average worker with a family plan was hit with 14% premium increase this year, pushing the bill to nearly $4,000 a year, according to a survey by the nonprofit Henry J. Kaiser Family Foundation and the Health Research and Educational Trust.

That is the largest annual increase since the survey began in 1999 and a marked change from previous years, when employers generally split the rise in the cost of premiums with their employees.

The average employer contribution to a family plan did not go up at all this year, meaning the entire increase was borne by workers.

At the same time, nearly a third of employers reported that they either reduced the scope of benefits they are offering this year or increased the amount that workers must pay out of pocket for their medical care.

Workers saw average copayments for routine office visits increase 10% and deductibles continue their surge upward.

In 2010, more than a quarter of American workers with employer-provided health coverage were in plans with deductibles of at least $1,000.

“It’s really bad news for everybody,” said Helen Darling, president of the National Business Group on Health, an organization of large employers that provide coverage to about 50 million workers, retirees and dependents.

Overall, premium growth slowed slightly this year to 3%, with the average annual cost of a family health plan reaching $13,770. Workers picked up 30% of that bill. The average plan for an individual cost $5,049.

The squeeze, reported by employers between January and May, largely reflects the fallout of the ongoing economic slowdown and may be ameliorated in future years as the new healthcare law is implemented.

But it could further complicate the Obama administration’s efforts to rally support for the law, which is expected to do relatively little in the short term to contain rising medical bills.

“There have been times when employers have been able to absorb costs. This is not one of those times,” said James Gelfand, health policy director at the U.S. Chamber of Commerce, a leading critic of the new law.

The law, which focused on expanding coverage for Americans who don’t get insurance through work, was designed to largely preserve the existing employer-based healthcare system.

Independent analyses of the law estimate that most Americans will continue to get insurance through their employer, as about 157 million do now.

Administration officials Thursday pointed to two new studies from the Rand Corp. and the Commonwealth Fund that predicted small businesses in particular would probably expand coverage in coming years, in part with help from billions of dollars of in new tax credits.

“We have really just begun our efforts,” said Nancy-Ann DeParle, director of the White House Office of Health Reform, emphasizing the growing number of tools government regulators have to control insurance premiums.

The Kaiser survey found that the percentage of firms offering health benefits rose to 69% from 60% this year, an unexpected increase that analysts speculate may reflect the failure of many businesses that didn’t offer benefits.

But the survey suggests that the coverage workers are being offered is becoming increasingly unattractive as employers try to control their costs in the down economy.

“We were all so focused on the reform debate that I think we took our eyes off the fact that what we call heath insurance in this country is changing,” said Kaiser foundation President Drew Altman. “What workers get looks less and less like the comprehensive coverage their parents had.”

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  1. john on September 8, 2010 at 12:27 pm

    I am all for a single payer plan. I do belive it would work alot better if healthcare were reformed first
    healthcare is necessary but today it’s way to expensive for what you get.
    It should not cost thousands of dollars to go to emergency for common medical problems.

  2. Melisa on September 20, 2010 at 4:39 pm

    My insurance premium just went up 27%, my deductible doubled, and the bastards cut the amount they’ll pay out for alternative care (I see a ND) by 20%. If I didn’t have a chronic disease there is no way I would pay them a cent!

  3. Cheryl on September 20, 2010 at 11:13 pm

    I pay $5,160 per year for my health insurance with COBRA. That’s JUST for me, myself and I. In the two years I’ve been paying it on my own, the premiums have gone up almost $100 a month, the deductible has doubled and the out-of-pocket limit has doubled. In addition, does anybody pay attention to their “explanation of benefits”??? When you pay a $25.00 co-pay at the doctor’s office, and the insurance company only approves a certain amount of the bill … and then you see that insurance has only paid $38.00 on that same bill, it leaves you scratching your head and thinking “hmmmm, I’m really getting screwed”. I found this out a couple years ago, when my husband was on a tier 4 medication (name brand) and the co-pay was $60.00 … insurance was only paying $28.00!!!! That means guess who, is paying the brunt of the cost of medication???? THIS is what we’re paying the high premiums for????? The only thing it’s good for is catastrophic care when a person goes to the hospital for a few days and then dies. Then you pay your deductible and out-of-pocket limit … the rest is on the insurance company. This is “health-care” American style. This is what the Republicans and many of our people in Washington are fighting to keep … the status quo … rich insurance companies get richer and keep contributing to the campaign coffers. The like to blame it on the hospitals but when the provider sends a bill for $500 and insurance only approves $146 and you pay $25 … do the math.