Employers provided insurance for approximately 152 million non-elderly US adults in 2018, covering more than 50% of the population (Kaiser Family Foundation (KFF) Employer Health Benefits 2018 Annual Survey). This year marks the 20th anniversary of the survey of private and non-federal public employers with 3+ workers. Unless noted, the statistics cited throughout this blog are attributed to the survey.
Some notable statistics about employer insurance coverage in 2018:
Types of plans employees enrolled in varied across the country. PPOs remained the most popular, with 49% of covered workers choosing this type of plan. Figure 1 provides the enrollment breakdown by plan type in 2018.
Like in past years, employees were responsible for paying part of their own or their families’ healthcare expenses.
Average premium costs varied by region of the country, industry, size, and type of businesses that offered employee coverage. Workers in the Northeast paid higher premiums for single and family coverage, while those in the south experienced relatively low family premiums. On average, covered workers contributed:
It was no surprise that premiums increased last year. Over the past decade, workers experienced a 55% increase in family coverage. In 2018, the average annual premiums were:
Premiums were less for those enrolled in high deductible health plans:
But high deductible health plans may not save employers in the long run. Some studies have suggested that healthcare service utilization decreased when employees and their families faced the high out-of-pocket costs associated with many high deductible health plans.
Figure 3 shows the breakdown of premium costs by plan and enrollment type.
Most employees (85%) were required to meet an annual deductible before the plan picked up the tab (see Figure 4). Employees responsible for meeting deductibles in 2018 paid, on average:
Many covered employees were also responsible for copayments and coinsurance (see Figure 5).
There was some good news: 99% of covered workers were protected by out-of-pocket maximums, which established in-network cost sharing thresholds for single coverage. But those limits also varied:
It’s worth noting again that workers experienced a 55% increase in family coverage between 2008-2012. In 2018 alone, the average premium increased:
Wages increased an average of 2.6%, which was virtually offset by the 2.5% increase in inflation (see Figure 6).
US Healthcare is the Most Expensive in the World
According to a recent study by the Institute for Health Metrics and Evaluation at the University of Washington:
Employers and employees are paying more and more for healthcare.
Cost Control Measures
Even with the dire numbers, employers and health plans have made an impact on the medical trend, reducing it to 5-5.7% a year over the past 5 years (Medical cost trend: Behind the numbers 2019, PWC). Some programs have been successful, including those that accomplish the following :
Employers offered 3 types of programs aimed at improving overall employee health:
Making Care More Accessible
Many large employers that offered benefits in 2018 covered care provided in alternative settings, increasing member accessibility to services. Employer also saved money from care provided in less costly settings than traditional sites of care.
Managing Provider Networks
A percentage of large employers offering health insurance in 2018 began or continued the following measures to better manage their provider networks:
The chart below summarizes the cost controlling measures large employers took in 2018:
Whether you’re a large firm or small, located in the east or in the west, the statistics I’ve provided can help you assess how your programs compare to your peers, at least at a very high level.
Benchmarking is a step in the right direction. But to get true insight into how your programs compare and identify cost savings opportunities such as site of care redirection, you need to integrate data across your human capital programs. At the very least, you need to understand the correlation between medical and pharmacy costs, two of your biggest benefits program cost drivers.