Health care costs are falling — for employers. A study released Thursday shows that employers are shifting a greater portion of total health care costs to workers. As employees see more deducted from their paycheck for health insurance, employers are adding the savings to their bottom lines. Analysts say the shift in health care costs is a corporate survival strategy as the U.S. economy continues to falter. Workers have little choice but to go along. In a terrible job market they keep their mouths shut and take their lumps.
Wages eclipsed by health care costs
Workers’ share of family insurance through employer plans rose 13.7 percent on average in 2010. The findings are from a survey released by the Kaiser Family Foundation and the Health Research & Educational Trust. The shift has saved employers nearly 1 percent on their share of premiums. In coverage of the survey, the Washington Post reports that employees are paying an average of 30 percent of the premium for family coverage and 19 percent for single coverage. The employee share of health care costs is at its highest point since the survey began 12 years ago. Since 2005, employees’ shares of premium payments have gone up 47 percent while overall health insurance costs have risen 27 percent. Over the same period, wages have increased 18 percent and the consumer price index, a measure of inflation, has risen 12 percent.
Employers have workers where they want them
Rising employee premiums are a sign of the times. Washington economic researcher Deborah Chollet said the severe economic downturn and weak labor market are the root causes. Chollet told CNNMoney that companies cutting staffs to the bone are looking for other ways to save money in the face of low consumer demand. Shifting increasing health care costs to employees is a no-brainer to the bean-counters. She said that in a strong job market, higher turnover helps companies contain health care costs. Currently turnover is virtually non-existent. The gainfully employed are determined not to go anywhere. More workers also feel compelled to make health insurance claims.
Less bang for the health care buck
Employees are giving up a greater health care deduction that isn’t translating into better health care. The Miami Herald reports that benefits were cut and out-of-pocket requirements increased at 30 percent of the companies surveyed. Annual deductibles are also raising. And 23 percent of employers raised worker contributions. About 157 million employees currently have health insurance, down from 159 million last year. More employers offer insurance this year. The survey counted 69 percent this year — a 9 percent increase. The survey suggested there is a catch to that statistic: A lot of employers that did not offer coverage didn’t make it through the recession, and the pool is smaller, so 69 percent is a deceptive number.
Sources
Washington Post: http://www.washingtonpost.com
CNNMoney: http://www.money.cnn.com
Miami Herald: http://www.miamiherald.com
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