Whenever I talk to staffing company owners, and ask them about their primary barriers to growth, the answers often are the same. Among them, human capital, or the lack of good, qualified workers, worker’s comp and of course continuing changes in (and rising costs of) employee health insurance. As we straddle this last week of 2011, and the new year, let’s look at some small, but steady changes in employee health insurance, and how and where ObamaCare figures in.
Here’s a little context to begin. Employment-based health benefits are the most common form of health insurance in the United States. In 2010, 156 million individuals under age 65, or 59% of that population, had employment-based health benefits.
In every year since 1998, premium increases have exceeded worker earnings increases and inflation. Health insurance premiums have more than doubled, while worker earnings have increased 46%.
Healthcare spending is expected to reach $2.7 trillion this year — or about $1 of every $6 spent in our economy. By 2020, health spending will account for a full fifth of America’s GDP.
Healthcare spending is expected to reach $2.7 trillion this year — or about $1 of every $6 spent in our economy. By 2020, health spending will account for a full fifth of America’s GDP.
According to the Kaiser Family Foundation, average family premiums in 2011 topped $15,000 — a 9% increase from 2010.
There are some more recent findings you may be interested in. Enrollment in so-called “consumer-driven” health plans continues to grow, according to the 11th annual EBRI/MGA Consumer Engagement in Health Care Survey.
In 2011, 7% of the population was enrolled in a consumer-driven health plan, or CDHP, compared with 5% a year ago.
The survey of over 4,700 people was conducted by the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates. The full report is published in the December 2011 EBRI Issue Brief, “Findings From the 2011 EBRI/MGA Consumer Engagement in Health Care Survey,” now available online at www.ebri.org.
Overall, 15.8 million adults ages 21–64 with private insurance were either in a CDHP or a high- deductible health plan that was eligible for a health savings account (HSA) this year, according to the survey.
As previous versions of the survey found, the 2011 survey suggests people who are enrolled in consumer-driven plans tend to have different characteristics than those in traditional health plans:
- They are somewhat more cost conscious
- They are more likely to try to find information about their doctor’s cost/quality from sources other than the health plan
- They are more likely to take advantage of a health risk assessment
- However, they are no more likely than those in traditional plans to participate in health promotion programs
Account-based health plans first appeared in 2001, when a handful of employers began to offer health reimbursement arrangements (HRAs).
Here are some other key findings of the survey:
- CDHP enrollees are more likely than traditional plan enrollees to have the chance to fill out a health risk assessment and have access to a health promotion program
- CDHP enrollees are more likely than traditional plan members to take advantage of the health risk assessment but not the health promotion program, with financial incentives a factor
- A significant portion of the population reported using a smartphone, and 1 in 5 reported using a tablet, and among that group, 25% reported using an app for health-related purposes
These changes in employee health insurance are happening as public confidence that employers and unions will continue to offer health coverage is falling, albeit not dramatically.
In November, the Employee Benefit Research Institute reported that 57% of Americans with employment-based coverage were extremely or very confident that their employer or union would continue to offer health coverage, down from 68% in 2000.
Then there is ObamaCare, to end this post on a point of controversy perhaps.
Forbes is reporting that “America’s doctors have conducted a full examination of the president’s health reform law — and their diagnosis of its effects on our healthcare system isn’t good.”
“America’s doctors have conducted a full examination of the president’s health reform law — and their diagnosis of its effects on our healthcare system isn’t good.”
President Obama promised his reform package would begin to curb out-of-control health care costs. But doctors don’t buy it. Forbes says only 25% of them feel that ObamaCare will reduce health insurance costs for consumers. Nine out of 10 surveyed say insurers will raise premiums for employers and individuals.
The Supreme Court agreed to determine the constitutionality of ObamaCare after 26 states appealed for it to do so.
As Yuval Levin explains at National Review, though, opponents shouldn’t lose focus of the future of our healthcare system.
What are some things you’re doing to control healthcare spending? Do you offer health assessments, wellness programs? Do you think ObamaCare will be struck down? Read Levin’s views, and let us know your thoughts in the comments.
{ 5 comments… read them below or add one }
I wouldn’t trust the National Review, a rabidly conservative and anachronistic rag that has long since lost relevance; however, exaggerated health care expense does cost America no small number of jobs, and President Obama has only made things worse with.
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The simplest way to deal with this (and also the best way to deal with the core underlying problem, health care cost inflation) is to get the ‘health insurance monkey’ off of the backs of employers and move to a single payer system. You can very quickly reap two big benefits: freeing up employers to redeploy resources toward growth (instead of insurance company premiums), and driving down health care costs via a single consumer with a very big stick (the government). The only losers are the insurance companies, and honestly, I don’t think they’re adding much value to the equation at this point!
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Thanks for the comment Jeff. Fortunately, and I am knocking on my glass office desk since I can’t find any wood at the moment, neither me nor my family has ever really tested our present insurance system. So I don’ t have any horror stories about catastrophic costs or a procedure or test or remedy that was ordered by a doctor and denied by an insurance provider. Once, while living in Norway though, I did cut my eyebrow open at the gym and walked in off the street to a nearby hospital and an ER physician who patched me up and sent me on my way with little more than a signature on a single form. So that worked! In this country, I agree cost inflation is indeed the culprit behind all this, and there are lots of ways and remedies for capping that I believe without reducing our standard of care. Beyond that, it gets a little murkier for me though in terms of best solutions. I also agree with Gregg this health care crisis is costing jobs. Forbes posted an article just a few hours ago saying, “Like it or not—as the growing exodus of insurers from the marketplace bears out—government, single-payer coverage is coming.” As supporting evidence they cite Principal Financial Group announcing late last year they were leaving the health insurance business, and their 840,000 clients. Another key player in the business, Cigna, has decided to quit the small business market in states like California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kansas, Missouri, New Hampshire, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas and Virginia. In Colorado and Michigan, insurance giant Aetna is bailing on both the small business and individual markets. The list goes on and on and can be reviewed in its entirety in the Galen Institute report. So maybe the single payer coverage provided by the federal government is coming anyway, under the name ObamaCare or something else.
David…any comment on National Review quality? you quote them so i assume you see something more there than i do
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I can lay claim to having had two interesting interviews with William F. Buckley, founder of the National Review. But I am not a frequent reader, nor a fan particularly. And if you notice my language, I did not recommend it per se. I wasn’t intending to anyway, although the mere act of supplying a link could make it seem that way. I was simply trying to introduce the point, one that Levin makes, that there is a constitutional side to the whole ObamaCare issue. In fact, one could argue the constitutional issue is THE issue, making the National Review post kind of ridiculous. I wish I could offer you something more profound than that Gregg, that I do indeed see something you don’t. Alas, that is not the case. I was merely aggregating, not advocating.