{"id":2041,"date":"2015-05-25T21:50:27","date_gmt":"2015-05-26T03:50:27","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/?p=2041"},"modified":"2015-05-25T21:50:27","modified_gmt":"2015-05-26T03:50:27","slug":"the-end-of-the-line-on-employer-sponsored-health-insurance","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2015\/05\/the-end-of-the-line-on-employer-sponsored-health-insurance.html","title":{"rendered":"The End of the Line on Employer-Sponsored Health Insurance"},"content":{"rendered":"\n<\/head>

Three numbers:<\/p>\n

2.3%<\/p>\n

2.2%<\/p>\n

1.8%<\/p>\n

That point to a major change in employer-sponsored health insurance in the United States.<\/p>\n

2.3% is the percent increase, annualized, in the average employer contribution for employee health insurance, according to a study by the Center for American Progress<\/a>, from the years 2007 to 2013.<\/p>\n

2.2% is the CPI annualized index over that period, January \u2013 January.<\/p>\n

1.8% is the the average wage increase <\/a>for those years, based on the Social Security Administration data.<\/p>\n

In other words:<\/p>\n

I had said in prior posts<\/a> that employer contributions to health insurance were going to decline, or, more precisely, that employers would keep pace with inflation but not with the higher rates of medical inflation, and that it\u2019s simply not possible<\/a> to go back to the status quo ante<\/em>. \u00a0I had not realized until now that that future has already happened, that employers are already, on average, choosing to increasing their healthcare spending by CPI, and no more, with employees paying the remainder as increased premiums and higher out-of-pocket costs.<\/p>\n

Now, the study\u00a0I was reading doesn\u2019t seem to understand this: \u00a0in their view, the \u201cnatural\u201d way of providing health insurance is through a fixed employer\/employee contribution cost-share, and that any decline in the employer cost-share level is \u201cunfair\u201d and must be fixed. \u00a0Their proposals for \u201cfixing\u201d this are a bit silly (require employers to disclose, each year what the change in cost-share is; require more no-out-of-pocket benefits, e.g., three doctor\u2019s visits, which would just increase the total premium, absent other changes; and require \u201crebates\u201d \u2014 which means that, after-the-fact, employers must pay to employees half the difference between their healthcare spending increase and the overall medical trend increases, a requirement which, if implemented, would simply mean that employers would factor this into their rate-setting).<\/p>\n

And the\u00a0AP article<\/a>\u00a0that directed me to this CAP study, \u201cDemocrats see skimpy insurance as the next health care issue,\u201d focused on the net result, of both this change in employer-sponsored insurance as well as the movement in the Exchange plans: \u00a0high deductibles which\u00a0make it difficult for low and moderate-income families to pay their out-of-pocket costs. \u00a0This is not really a surprise, or, at any rate, should not have been. \u00a0It should have been clear from the start that these individuals and families would still need sliding-scale clinics, payment plans, and general financial assistance; heck, my very first \u201cvouchercare\u201d post<\/a> presumed sliding-scale clinics for those who can\u2019t afford the deductible.<\/p>\n

With Exchange plans, were the Democrats still in power, it\u2019s easy to see the next debate being over a reduction in allowable maximum out-of-pocket costs, or a demand that the Actuarial Value levels associated with the \u201cmetal levels\u201d, and the corresponding subsidies, be increased.<\/p>\n

With employer plans, it\u2019s hard to see precisely what happens next, when the relative subsidy level decreases as medical inflation continues to rise at greater levels than CPI and employer subsidy levels. \u00a0One hopes that, as the \u201cprivate exchange\u201d concept becomes the norm<\/a>, consumers will at least have greater choice levels, but it\u2019s hard to envision the 21st-century version of HMOs, as envisioned by Steven Brill<\/a>, coming into wide prevalence as long as insurance is predominantly delivered by employers.<\/p>\n

But here\u2019s a potential next step:<\/p>\n

What would happen if employers were able to offer a \u201cvoucher\u201d to their employees, to be used for the purchase of health care\/health insurance, on the same tax-free basis as when they offer health insurance directly? \u00a0Employees could use this voucher in whatever way gives them the \u201cbest deal\u201d rather than being dependent on the employer\u2019s selections, which may be more one-size-fits-all for their employee group.<\/p>\n

And that\u2019s all I\u2019ve got for you tonight.<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

Three numbers: 2.3% 2.2% 1.8% That point to a major change in employer-sponsored health insurance in the United States. 2.3% is the percent increase, annualized, in the average employer contribution for employee health insurance, according to a study by the Center for American Progress, from the years 2007 to 2013. 2.2% is the CPI annualized […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2041","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nThe End of the Line on Employer-Sponsored Health Insurance<\/title>\n<meta name=\"description\" content=\"Three numbers: 2.3% 2.2% 1.8% That point to a major change in employer-sponsored health insurance in the United States. 2.3% is the percent increase,\" \/>\n<meta name=\"robots\" content=\"index, follow, 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