Thursday, December 20, 2018

Employer-sponsored health plans in Ky. saw modest cost hikes in 2017, but many people struggle with premiums, deductibles, etc.

By Melissa Patrick
Kentucky Health News

While much attention has recently been given to the number of people who sign up for health insurance on the federal exchange, the reality is that most people get their health insurance through their employer. A recent analysis by The Commonwealth Fund, a foundation interested in the health-care system, shows that the overall cost of employer-sponsored plans keeps going up.

“The vast majority of people under age 65 in the U.S., 152 million, get their health insurance through an employer, and many of them can barely afford to pay for it. Several bipartisan policy fixes have the potential to reduce health care burdens for workers and families struggling to afford the health care they need, while also making our health system work better for everyone," Dr. David Blumenthal, president of The Commonwealth Fund, said in a news release.

According to the analysis, 56 percent of people under 65 get their health insurance through an employer, while only 9 percent get their plans through a state or federal marketplace.

In Kentucky, the most recent open enrollment snapshot shows that 90,625 Kentuckians signed up for 2019 coverage on the federal exchange, compared to nearly 2 million who got coverage from an employer in 2017, according to the latest numbers reported by the Kaiser Family Foundation.

Average employee premium contribution, plus average deductible, as a
percentage of median state income in 2017. It shows Kentuckians spent
13 percent of their annual income on health coverage, or $7,136.
The analysis found that Kentucky families covered through employer plans spent, on average, 13 percent of their yearly income toward health coverage in 2017 — or $7,136 in potential out-of pocket spending. That was slightly above the national average of 12 percent.

That was only a 1.6 percent increase from 2016, compared to a 6.8 percent jump in the national rate. But when you compare the state's average potential out-of-pocket spending in 2017 to what Kentuckians were paying a decade ago ($3,886), it's up 84 percent.

And because Kentuckians make less money on average than people in other states, they spend a larger share of their incomes on their premiums and deductibles. For example, in Kentucky, the average household income was about $47,000 between 2016 and 2017, compared to $62,000 nationally.

“The cost of employer health-insurance premiums and deductibles continues to outpace growth in workers’ wages," Sara Collins, lead author of the study, said in a Commonwealth Fund news release. "This is concerning, because it may put both coverage and health care out of reach for people who need it most — people with low incomes and those with health problems."

The analysis also showed that premium cost for single coverage plans saw the biggest jump between 2016 and 2017, from $1,290 to $1,453, or nearly 13 percent. The rest of the nation saw a 6.8 percent increase for this measure.

But otherwise, the changes were modest.

Deductible costs for single coverage dropped 1.4 percent, to $1,878; premiums for family coverage increased .6 percent, to $4,764 and deductibles for the combined average of single and family coverage increased by .4 percent, to $3,138. National increases were much higher for each of these measures.

In general, the report says that employees pay about one-fourth of the employers portion of the premium costs — and that holds true for Kentucky. Employer-sponsored insurance premiums for single coverage in Kentucky in 2017 was $6,101 (up 6 percent from 2016) and $16,948 for family sponsored coverage (up 1.6 percent from 2016).

The researchers called on policymakers to address these rising health care costs and offered specific, detailed suggestions. "Policymakers will need to recognize that the increasing economic strain of health care costs facing middle-income and poor Americans is driven by multiple interrelated factors and will require a comprehensive solution," says the report.

The study used data from the federal Medical Expenditure Panel Survey. Researchers surveyed more than 40,000 business establishments in 2017, with an overall response rate of 65.8 percent. It looked at both premiums, the amount a person has to pay each month for their plan, and deductibles, the amount a person has to pay before an insurance company's payments kick in.

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