Employer health benefits survey shows rising patient premiums and escalating company costs

 

Learn the key takeaways from the KFF 2020 Employer Health Benefits Survey

The recently published Kaiser Family Foundation 2020 Employer Health Benefits Survey reveals some concerning trends for businesses and their employees.

To provide current information about employer-sponsored health benefits, the Kaiser Family Foundation (KFF) conducts an annual Employer Health Benefits Survey (EHBS) of private and non-federal public employers with three or more workers.

The 2020 survey included 1,765 interviews with non-federal public and private firms. It provides a detailed look at trends in employer-sponsored health coverage, including:

• Premiums
• Employee contributions
• Cost-sharing provisions
• Offer rates
• Wellness programs, and
• Employer practices.

One thing to note: The EHBS was conducted from January to July as the COVID-19 pandemic and economic crisis unfolded and may not capture its full impact on costs and coverage. For example, many of the metrics analyzed are determined before plan year begins, so it is likely that responses for those items were largely unaffected by the pandemic.

Join us as we explore the key findings.

The cost of healthcare premiums is rising faster than wages

Over the past year, the average single premium increased 4% and the average family premium increased 4% (see Figure A). Meanwhile, workers’ wages increased 3.4% and inflation increased 2.1%. [1]

Since 2010, average family premiums have increased 55%, at least twice as fast as wages (27%) and inflation (19%), according to KFF’s press release about the survey. [2]

Deductibles are also rising

Eighty-three percent of covered workers have a general annual deductible for single coverage that must be met before most services are paid for by the plan.

Over the past five years, the percentage of covered workers with a general annual deductible of $2,000 or more for single coverage has grown from 19% to 26% (see Figure E).

Whether or not a deductible applies, a large share of covered workers also pay a portion of the cost when they visit an in-network physician, through either a copayment or coinsurance.

Virtually all covered workers are in plans with a limit on in-network cost sharing (called an out-of-pocket maximum) for single coverage, though the limits vary significantly. Among covered workers in plans with an out-of-pocket maximum for single coverage, 11% are in a plan with an out-of-pocket maximum of less than $2,000, while 18% are in a plan with an out-of-pocket maximum of $6,000 or more.

How employers are managing healthcare costs

Fifty-six percent of firms offer health benefits to at least some of their workers, similar to the percentage last year (see Figure F).

But as healthcare premiums continue to rise, it’s even harder than normal to predict where they’ll go in the future. For almost all employers, healthcare is an expenditure they can’t control.

The impact on health outcomes

Because of this unpredictability, many employers are attempting to offset their financial burden by shifting some of the cost to workers, as shown in Figure A. Not only does this affect employee satisfaction and turnover, but it could come down to those employees having to choose between their everyday essentials and their health.

With premiums costing more and out-of-pocket costs escalating, people delay care—which can lead to worse health problems down the line. However, many businesses simply feel that they have no alternative than to pass some of these costs on to their workers.

A shifting focus to preventive care

In an effort to prevent higher health costs in the future, more and more employers are utilizing programs aimed at helping workers identify health issues and manage their chronic conditions. As seen in Figure G, these include health risk assessments, biometric screenings, and health promotion programs—including smoking cessation, weight management, and behavioral or lifestyle coaching.

Many of these employers are encouraging employee participation by offering incentives. Among large firms with any type of incentive, 20% have a maximum incentive of $150 or less, while 20% have a maximum incentive of more than $1,000.

The key takeaways for employers

Our clinical leadership predicts that the long-lasting implications of pandemic-induced delayed procedures and screenings will begin to take effect starting in 2021. Escalating costs coupled with increasingly limited options for independent primary care mean that companies should begin to take a more critical look at their employer health benefits today.

You can read the full KFF 2020 Employer Health Benefits Survey here.

How WeCare tlc can help

As part of our commitment to change how healthcare is delivered in the United States, we work with employers to help them lower and control their healthcare costs. The result is that companies can better financially plan for the future while giving their employees all the tools they need to take charge of their health.

As a leading provider of onsite and nearsite health centers, we’re proud to be continually expanding the breadth of the healthcare services we offer. This includes CommunityCare, an innovative direct primary care membership program, and a full suite of COVID-19 response & testing services.

If you’d like to learn more about how WeCare tlc can help you lower and control your healthcare costs, please contact us today.