Americans who have fallen for the GOP propaganda rants against health care reform are hurting themselves. They may not know it yet, but the financial beating and health care risks they are courting by supporting sabotage or repeal of reform are now being rolled out in a range of new ways as employers continue to shift annual — and often double digit — insurance costs entirely to their employees. If reform were to be rolled back, as the new Republican congressional majority promises to do, it would simply leave the health care industry free to continue to its price gouging and inefficient ways.
Insurers, including our own local giant insurance companies, have been ratcheting costs up dramatically over the past decade for what the industry calls same-benefit policies. Employers have generally sought price relief by “buying down” coverage, i.e., buying less comprehensive coverage, or requiring employees to pay higher deductibles, higher copays and higher premiums. Other cost-shifting methods include fixing limits on selected treatments, excluding some treatments from qualifying toward their deductible costs, and charging more for carrying dependents.
Until recently, employers that provided health insurance benefits had generally paid around 80 percent of the cost of employee premiums and required employees to pay 20 percent. (In Tennessee, fewer employers offer insurance; those who do commonly require employees to pay a higher share). But now, most companies have begun passing on the full cost of annual premium increases to employees, new surveys show. That effectively sticks employees with huge increases (often 30 percent to 40 percent) in their cost share.
A simple example shows how that percentage increase hits. Consider an employee who is paying a 20 percent share, say $20, of an employer’s $100 weekly total premium for her family coverage policy. If the overall policy costs goes up 6 percent, or $6, and the total increase is passed entirely to the employee, her cost share rises to $26, a 33 percent increase from $20. If she’s also paying higher deductibles and copays, her medical costs as a percentage of her income may be even higher if she gets sick. And her costs may be higher still if the policy narrows coverage of treatments which count toward the upfront deductible, or which are covered at all at any stage of costs.
It’s no surprise that an employee’s share of a typical company-sponsored family coverage policy is now around $4,000 a year, and that out-of-pocket costs are soaring excessively above the front-end premium costs. With health care costs continuing to rise at more than twice the rate of general inflation, as it has for at least a decade, it’s also clear why so many small to midsize employers have dropped employee health care plans altogether.