While employer-sponsored health benefits remain relatively stable, worker-borne costs rise

Employers and health-insured workers alike have felt the financial pinch of more than a doubling health insurance premiums and contributions since 2003, according to Kaiser Family Foundation (KFF).

In 2008, the average employer share for health insurance was $12,680, and the employee's, $3,354. Increases between 2003 and 2008 calculate to 119% foremployer-sponsors, and 117 % for the insured workers, on average.

These are the findings from the annual mega-study on U.S. company health benefits, the 2008 Kaiser Family Foundation/HRET Survey on Employer-Sponsored Health Benefits.

About 62% of Americans receive health benefits through employers, so the results of this study are important to review.

Among the study's major findings are:

- The proportion of employers sponsoring health insurance has remained fairly stable in the past couple of years.

- The level of cost-sharing with employees is increasing.

- The proportion of workers in HDHPs has increased from 5% in 2007 to 8% in 2008.

- Enrollees in HMOs, PPOs, and POS plans generally have copayments for services (about $19 for a general physician visit and $26 for a specialist) and prescription drugs (see below). Enrollees in high-deductible health plans tend to have to pay a coinsurance amount up to a deductible, after which costs are covered.

- For tiered prescription drug plans, the average co-pay for generic (first tier) is $10, for second-tier (preferred brand) $26, $46 for third-tier (non-preferred brand), and $75 for fourth-tier, specialty drugs (where some have a coinsurance share of 28% by the insured worker).

- There is significant variation in these costs for workers based on geography and the size and industry of the firms in which they work. See my discussion on this key issue in Health Populi, Bureaucrats pay half the deductibles that construction workers do, from September 8, 2008.

This year, KFF added questions about employer-sponsored wellness programs and retiree health benefits. Among employers offering health insurance, 53% of small firms (3–199 workers) and 88% of large firms (200 or more workers) offer at least one wellness programs: weight loss, gym membership discounts or on-site exercise facilities, smoking cessation program, personal health coaching, classes in nutrition or healthy living, web-based resources for healthy living, or a wellness newsletter. Firms offering health coverage and wellness benefits report that most wellness benefits (70%) are provided through the health plan rather than by the firm directly. Only 7% are offering employees incentives such as gift cards, travel, merchandise, or cash (7%), a smaller share of the premium (4%), or a lower deductible (1%) to participate in wellness programs.

The survey analyzed the responses of 1,927 employers between January and May 2008.

Health Populi's Hot Points: KFF assessed employers' health benefit strategies for 2009. 49% of companies say they are likely to increase the amount employees pay for health insurance. 45% of employers will increase the amount employees pay for copays or coinsurance, and 41% will likely increase the cost of prescription drugs to covered employees.

Thus, while employees appear to be committed to continuing to sponsor health insurance for employees, the workers' cost-shares will likely increase in 2009. Marry this finding to yesterday's Health Populi blog findings on consumers' personal health financing challenges -- and one can forecast a growing consumer medical debt problem based on the Kaiser survey.