Employees Pay More and Get Less from Medical Coverage

By Emily P. Walker, Washington Correspondent, MedPage Today Published: September 03, 2010   WASHINGTON -- Workers are paying 14% more for their employer-sponsored plans than they did last year as a bigger chunk of healthcare costs shifted from employers to employees, according to a new survey. Workers paid nearly $3,997 this year toward the cost of family healthcare coverage -- up $482 from the average employee share in 2009 and a jump of 47% from the average employee share for family coverage in 2005. Meanwhile, employers are paying an average of $9,773, down $87 from what they paid last year. Moreover, 30% of companies surveyed said they reduced the scope of benefits at the same time that they increased the amount their employees must pay for health insurance in the past year. The data come from a 2010 Employer Health Benefits Survey released Thursday by the Kaiser Family Foundation and the Health Research & Educational Trust. "The striking finding is the increase in the employee's share with no increase in the employer's share," said Drew Altman, Kaiser Family Foundation president and CEO in a Thursday call with reporters. Employees with individual coverage are contributing an average of $899 in 2010, up from an average of $779 in 2009, according to the Kaiser telephone survey, which covered public and private employers with three or more workers and was conducted from January through May. Altman said the struggling economy has caused businesses to shift more of the costs onto workers by requiring them to pay a greater share of their healthcare costs. In addition to the higher premiums, many employers are also raising the annual deductibles -- 27% of employees faced deductibles of at least $1,000 in 2010 compared with last year when 22% of workers had deductibles of $1,000 or more, the survey found. What employees pay for their healthcare costs has increased much more than their wages, the report found. Since 2005, workers' contributions to premiums have gone up 47% while wages increased 18% (and inflation rose 12%). "From a consumer perspective, the cost of health insurance just keeps going up faster than wages," Altman said. The survey also looked at the most common type of insurance offered to employees and found that Preferred Provider Organizations (PPOs) continue to dominate the employer market, enrolling 58% of covered workers. The average premiums for a family PPO plan topped $14,000 annually in 2010, with $3,823 of tab paid by the employee, representing a 20% increase from 2006. (Another recent survey by United Benefit Advisors found that PPOs covered about 66% of all employees). About 157 million employees receive health insurance through their employers, according to Kaiser. The Affordable Care Act (ACA), the healthcare reform law signed by President Obama on March 23, contains provisions that are supposed to slow the growth of healthcare spending, but it's unclear if those savings will translate into savings for the average worker. Altman called the ACA "the only thing we have coming on line as a country to control costs other than what now seems like the primary default strategy in the private sector -- shifting costs to people."

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