There is a thin glimmer of good news, relatively speaking, in the cost trends for employer-based health insurance policies this year, but it’s largely limited to what employers have to pay. For employees, the trend is more bad news, writ large. A comprehensive new report shows that employers’ cost for employee health insurance policies grew on average by just 3 percent this year, the lowest increase in a decade. But employers forced employees to absorb a larger portion of their policy costs, increasing their cost to employees for their new policies an average of 14 percent.
Many employers, moreover, dumped additional sharp increases on their employees through higher out-of-pocket expenses for bigger deductibles and co-pays under the new policies. They also often added new exclusions on the types or cost of care that were previously included in employees’ deductible-eligible expenses.
These findings, reported last week by the Kaiser Family Foundation and the Health Research and Educational Trust, suggest that while the rate of increases in employer-based health insurance appears to be coming down, the reality is much more complicated, and not nearly so rosy.
With employers shifting more out-of-pocket costs to employees by reducing coverage – a tactic known as “buying-down” insurance costs – it’s really hard to know if the average annual rate of cost increases for health care policies is actually coming down much at all.
According to the new survey, for example, 17 percent of employees at large firms now have deductibles that exceed $1,000. In 2006, just 6 percent of workers paid that much in deductibles before their policy coverage kicked in. Nearly 50 percent of employees in smaller firms are now forced to pay deductibles of $1,000 or more. Four years ago, just 16 percent had deductibles that high.