Health insurance costs at record highs, coverage erodes
Employer-provided health insurance coverage for the average American family now costs as much as a small car – $20,000 – every year.
That’s the finding of a just released study by the Kaiser Family Foundation nonprofit health research group.
The foundation’s annual survey of employer-provided health insurance plans found that employees, on average, pay about a third of that annual cost for premiums deducted from their salaries.
But that $6,000 doesn’t include what they are paying out of pocket for health insurance deductibles, co-pays and other medical expenses that aren’t covered by their insurance plan.
Paying for health insurance but avoiding the doctor
The news is even worse for low-paid workers. According to Kaiser, at organizations where more than 35% of workers make less than $25,000 a year, the few that sign up for employer-provided health insurance plans face premiums closer to $7,000 a year.
The majority of those low-paid employees never enroll.
And even for those that do enroll, finding the money to pay out of pocket expenses, like co-pays, for even routine healthcare services often proves impossible.
Dan Macklin, CEO of Salary Finance, which offers salary-secured loans to workers as an alternative to payday loans or raiding retirement accounts for emergency bills, told HR Morning that company research found 48% of U.S. employees are under financial stress.
And Federal Reserve data indicates nearly 40% of American workers would have to borrow money or sell an asset to cover a $400 expense they aren’t expecting.
As a result, many employees with high-deductible health insurance plans are avoiding doctor visits and going without medications.
Those people are effectively paying all that money for nothing unless they have a catastrophic event that leaves them with no choice and pushes them past the deductible limit.
Employers’ health insurance balancing act
There is some (partially) good news.
In the current tight labor market, employers are trying to control employee health insurance costs while still offering benefits that will attract good workers.
Some are trying to keep employee contribution increases to a minimum by restricting the selection of providers available under their health insurance plans or specifying which pharmacies employees can use.
But, while lower-skilled, lower-paid workers may have to be OK with that tradeoff, many of the
And, if they are going to shoulder more of the steadily increasing cost of health insurance, they are going to demand higher salaries and other benefits that employers will find hard to pull back if the economy slows.
Perhaps employers would be better off buying those employees a new car every year and asking them to use an Affordable Care Act (ACA) policy or pay the whole cost of health insurance themselves.
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