Yep, and what people don't always realize is that because employer health plans get more expensive every year for employers, it negatively impacts wage growth. You are paying for it even if you don't necessarily feel it.
This is really important. Pulled from the underlying study[1], employers cover 82%/70% (individual/family) of the cost of healthcare. Those numbers are down just slightly from 86%/73% in 2019.
Or, put another way, employers have borne 69%/80% of the cost of healthcare increases. You complain because your individual plan has gone up by $986 in 20 years? Your employer's cost has gone up $4,005. Oh, and that's with cutting the underlying coverage ("skimpier").
It negatively impacts wage growth because that extra $4k is a bottom-line benefit (or cost of employment, if you want to think about it that way).
Finally, note the disparity between individual and family plans. Employers are offering 2.5x more benefit—nearly $9,000 more—to workers with families.
Fig. 1.10 shows premiums increasing from $2,196/$5,791 in 2019 to $7,188/$20,576. (Note also that 72% of that is attributed to premium increases vs. inflation and worker earnings, per Fig. 1.14.) Fig 6.1 shows % of premium paid by workers going from 14%/27% to 18%/30%.
The benefit for employers is there are a lot of workers who are there now solely for their family health insurance coverage. I have a feeling this has prevented earlier action by employers, but now it’s past the tipping point.
> Finally, note the disparity between individual and family plans. Employers are offering 2.5x more benefit—nearly $9,000 more—to workers with families.
Interestingly, my employer discloses the full premium that they pay to the health insurer every year. As an employee without a partner/dependents (I just graduated college/started my career), my employer spends ~$17k/year less on my health/dental/vision benefits than employees with a partner/dependents.
That effective pay difference makes me mildly salty.
It's an interesting topic, particularly as it relates to employers being women/family-friendly. How do you feel about parental leave, for instance?
Of course, this is a benefit that's within your control: just get a partner/dependent! And the flip side is that even individual employees might value knowing that the company "has your back" as your family situation changes.
Or, more bluntly, your company has to offer disparate benefits, because other employers do, and no employee with a family would work for your company otherwise.
Of course, all this masks the REAL problem that employers and healthcare are so intertwined. Even this article puts some of the blame on employers, when really it's the healthcare companies and the overall rising cost of care.
But the individual policies on the exchange have increased year over year as well, and a lot of those insurers on the exchange went out of business/disappeared after 2-3 years anyway.
(from 2017-2018 for example insurance on the exchange increased 32% for silver plans and 20% for Gold plans)
I don't understand what that has to do my comment. I never mentioned anything about the exchanges. Health insurance policies generally get more expensive year over year for everyone, whether an employer is paying for it or you as an individual.
You seem to be highlighting employer provided insurance costs increase (which they do), but historically they increase at a lower rate than individual plans (i.e. the alternative).
The articles is about employer health plans getting more expensive, the comment was about employer health plans getting more expensive...whats the alternative to an employer provided health plan? An individual private plan, I thought it seemed relevant those are increasing in cost too (at a much higher rate).
> whats the alternative to an employer provided health plan?
There are a number of alternatives:
1. Government health plan at the state level (i.e. the Canada model)
2. Compulsory private insurance (i.e. the Switzerland model). But employers don't provide it and insurers have to insure everyone who pays. Single, larger, and more diverse risk pool instead of 3 separate pools - one with working age people and children, one with old people, one with everyone else
3. Government-owned and -operated hospitals and clinics, free at the point of use (i.e. the UK model)
4. Government health plan at the federal level (i.e. the France model)
All four have been found to cost less per patient for similar or better outcomes.
Doesn’t the fact that vastly different systems perform better than the US possibly suggest that our problem is something other than the payor model? What is the theoretical reason why US costs would be higher than Switzerland? Premiums for private insurance should be much lower in the US, given that Medicare takes high cost people out of the private pool.
The US hasn't had compulsory private insurance up until about 10 years ago. Before that costs were going up even faster[1]. Even then if your employer is providing your health plan the amount of "shopping around" you can do is limited - most companies have 2 or 3 options (a PPO, an HMO and something with an HSA). This leaves only the uninsured (i.e. the poor) or previously uninsurable (pre-existing conditions) in the actual open private insurance marketplace. It's not surprising that premiums there will be crazy high and it's not really that close to being the Swiss model.
> our problem is something other than the payor model
I partially agree with that - the payer model is one facet among many. There are other problems with healthcare in the US. Hospitals can veto opening of competing hospitals in the area, complex billing, not enough residency spots leading to a shortage of doctors, whatever the F is happening with prescription drugs etc. GP was only asking for alternatives to employer healthcare though.
The difference between Switzerland and the US is that in Switzerland pricing is regulated. The free market does not work when your life is at stake. You can shop around as much as you like for a butt enlargement and skip it if it's too expensive, but if you find a bat in the bedroom you need a physician straightaway, and then he will overcharge you.
There are some procedures where shopping around is conceivably an option.
Once you're in desperate need (say, when it's bad enough that you're calling an ambulance), or unconscious, it's not realistic to suggest price-shopping.
Markets of the mostly-free sort work well enough for commodity products, like the kind of peanut butter you're buying a jar of every few weeks (though even that's regulated, from things to food safety to nutrition labeling); for everything else, government's a fabulous tool to make sure people aren't taken advantage of, whether it's through heavy regulation (e.g. Switzerland, as someone mentioned) or offering the service itself (e.g. UK).
The vast majority of health care is a commodity product. Unless you have some super rare condition, whatever your problem happens to be it's extremely likely to receive more or less the same treatment from a large number of potential providers.
Yes, it would be great if US employees had those options, but they don't hence they aren't alternatives. The main alternative in the US to an employer based group insurance policy is an individual plan.
One day the US may catch up to the rest of the world, but unfortunately, the US seems content with millions of uninsured, healthcare related bankruptcies, and milking those who can afford coverage more every year in exchange for less.
