U.S. workers’ health costs continue to soar

Trend outpacing wages, survey finds

WASHINGTON — American workers’ health insurance premiums and deductibles have continued to tick upward this year, outpacing wage growth and inflation, according to a new national survey of employers.

The increases extend a long-running trend that is pinching workers and their families, and fueling widespread anxiety about medical costs.

More than a quarter of all workers with health coverage now have a deductible of at least $2,000 for single coverage, the survey by the nonprofit Kaiser Family Foundation found.

In 2009, by comparison, just 7 percent of covered workers had to pay $2,000 out of pocket before their health coverage kicked in.

“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,” said Drew Altman, president of the foundation.

Rising health care costs — particularly for Americans who do not get health coverage from an employer, but

buy it on their own — have fueled the Trump administration’s attacks on the Affordable Care Act, often called Obamacare.

In response, the current administration has taken several steps to increase the availability of less comprehensive health plans that don’t offer a full range of benefits.

But the new report underscores that even health plans offered by employers — and not subject to all the benefit mandates in the 2010 health care law — are very expensive.

The average cost of a family health plan is now $19,616 a year, with workers contributing $5,547, or about a quarter of the cost. Employers are picking up the balance of the cost of workers’ health benefits.

Health insurance premiums have been rising more modestly than deductibles, a trend that has continued this year, with the average premium for family coverage rising 5 percent, according to the survey.

Employers continue to raise deductibles on their health plans in part because they encourage those who use care to consider prices or even rethink whether they need the care since they are paying more of the upfront cost, said Paul Fronstin, an economist with the Washington-based nonprofit Employee Benefit Research Institute.

He said it is also simpler for companies to increase deductibles instead of making more complex changes like adjusting the network of care providers covered under their plan to save money.

Kaiser also said that deductibles are growing partially

because some employers soften that upfront cost by giving their workers tax-advantaged savings accounts to help pay the medical expenses.

While deductibles for employer-sponsored coverage are rising, they are still several thousand dollars smaller than deductibles seen in the Affordable Care Act’s marketplaces for people who don’t get insurance through work.

Employers’ rising health costs are often singled out as a cause for stagnant wage growth in recent years, as businesses have put money into health benefits that might otherwise have gone to workers’ paychecks.

Employers — particularly small businesses — also frequently cite rising health costs as a reason why they stop offering health benefits.

American employers are the largest source of health coverage in the country, insuring about 152 million people.

Surveys over the last two decades have documented a slow erosion in employer-provided health coverage.

In 2000, the annual Kaiser survey found that 68 percent of employers offered health benefits. In 2017, the share had dropped to 53 percent.

The 2018 survey suggests that trend may be slowing, or even reversing, however, as the share of employers offering health benefits increased to 57 percent.

That change is consistent with employer surveys conducted by the benefit research institute, which started seeing an increase in employers offering benefits in 2015.

The increase started that year with employers with 100 to 999 employees, the institute found.

In 2016, there was an increase for firms with between 10 and 99 employees. And in

2017, the share of firms with fewer than 10 employees offering health benefits rose.

Fronstin said the changes probably reflected the labor market, which has been tightening for years as the unemployment rate has fallen

during the long recovery following the recession a decade ago.