Health Costs and the Disappearing Paycheck

Every day in America the discussion of Health Costs goes from the news room to the living room of 152 million Americans whose benefits provided by an employer sponsored plan. They don’t need the news anchor to tell them things are going in the wrong direction.

The latest Health Benefits Survey by the Kaiser Family Foundation tells the story of how healthcare costs are increasingly eating up more of the earnings of workers particpating in plans that are becoming harder for companies to provide as costs escalate.

The  2018 benchmark Kaiser Family Foundation Employer Health Benefits Survey chronicles the impact of rising health costs on both workers and employers of all sizes providing sponsored health plans. Top line things to know from this survey:

  • Annual family premiums for employer-sponsored health insurance rose 5 percent to average $19,616 in the past year, extending a seven-year run of moderate increases. On average, workers are now contributing $5,547 toward the cost of family coverage, with employers paying the rest.
  • Since 2008, annual deductibles have increased eight times faster than workers’ earnings and three times faster than general inflation.
  • A quarter (26%) of all covered workers are now in plans with a deductible of at least $2,000, up from 22 percent last year and 15 percent five years ago.  Among covered workers at small firms (fewer than 200 workers), 42 percent face a deductible of at least $2,000.

While there is a great deal of focus on expanding access to health services for the uninsured, those who are insured by company plans face their own set of challenges in the ever-growing personal costs of being insured.

The burden of deductibles on workers will continue to impact them in two ways: a growing share of covered workers will face a general annual deductible, and the average deductible will continue to increase faster than increases in take-home pay.

When it comes to employers being proactive in finding ways to help employees manage health (rather than merely paying bills when they are not) there are several trends worth noting:

  • Among large firms that offer health benefits, one in five (21%) report they collect some information from workers’ mobile apps or wearable devices such as a FitBit or Apple Watch as part of their wellness or health promotion programs. That’s up from 14 percent last year.
  • Most large offering employers (70%) provide workers with opportunities to complete health risk assessments, which are questionnaires about enrollees’ medical history, health status, and lifestyle, or biometric screenings, which are health examinations conducted by a medical professional, or both. Thirty-eight percent of large offering firms provide incentives for workers to participate in these programs. The maximum financial incentives for these and other wellness programs often total $500 or more.
  • Telemedicine: About three quarters (74%) of large offering firms (at least 200 workers) cover services provided through telemedicine, such as video chat and remote monitoring, which allow a patient to get care from a provider at a remote location. That’s up from 63 percent last year and 27% in 2015.
  • Retail health clinics: Similarly, three quarters (76%) of large offering firms cover services received in retail clinics, such as those located in pharmacies, supermarkets and other retail stores. A small share also provide financial incentives for workers to use these clinics.

“Health costs don’t rise in a vacuum. As long as out-of-pocket costs for deductibles, drugs, surprise bills and more continue to outpace wage growth, people will be frustrated by their medical bills and see health costs as huge pocketbook and political issues,” KFF President and CEO Drew Altman said.


For Consideration:

  • How is the trend of rising deductibles and other “out-of-pocket” expenses impacting you and your family? Is this a minor inconvenience or a major issue impacting other aspects of your life (e.g. daily living expenses, vacations, saving for retirement or college)?
  • How does this issue rank relative to issues you would like to have elected leaders review and address?
  • To lower costs how open are you to trying new activities such as actively particpating in workplace wellness programs or using lower cost care options such as telemedicine?

Additional Resources:

The complete Employer Health Benefits Survey report can be downloaded here which includes over 200 exhibits and in-depth review of key issues impacting both the worker and the employers who also continue to be impacted by rapidly increasing health costs.

Download the Summary of Findings which provides an overview of the 2018 survey results. This serves as a great handout for discussions or email attachment for those interested in learning more about this important issues impacting workers.

This related brief on the Peterson-Kaiser Health System Tracker examines employer claims data to measure the uptake of telemedicine services by employees and their family members.

Financial Burden of Medical Care: A Family Perspective: This downloadable data brief from the National Center for Health Statistics utilizes data from the National Health Interview Survey (NHIS) to provide key findings on the financial burden medical care has on American families. The brief reports that 1 in 5 persons was in a family having problems paying medical bills, and 1 in 10 persons was in a family with medical bills that they were unable to pay at all.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s