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Workers Crushed as Companies Offload Health Costs

In response to rising costs, companies are shifting health care burdens onto their employees, USA Today reports:

More than half of companies (56%) increased employees’ share of health care premiums or co-payments for doctors’ visits in 2013, and 59% of employers say they intend to do the same in 2014, according to the annual Aflac WorkForces Report. It’s based on a survey of 1,856 employers and 5,209 employees at small, medium and large-size companies […]

The need to control costs is driving many companies’ decisions on benefits […]

The report notes that the Kaiser Family Foundation finds that health care premiums have increased 80% since 2003, nearly three times as fast as wages (31%) and inflation (27%).

For the majority of Americans who still get their insurance through their employers, Obamacare won’t deliver much relief. The whole debate over Obamacare, and the law itself, passes completely over this central point.

On the one hand, this financial pressure could advance an important interest. Higher co-pays could reduce the amount of health care Americans consume, which would be a good thing on balance. On the other hand, there will definitely be a point of diminishing returns, and plenty of people who don’t use much care will be hit by higher premiums. Unless parallel measures are taken to reduce overall costs as well as make individuals bear more of them, even workers who become more disciplined in their health care spending will be crushed.

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  • Ghosts of Benghazi

    Unintended or intended consequence? Mind blowing, no?

  • Pete

    Democrats are something else, aren’t they?

  • Andrew Allison

    This post, while illustrating that employer-provided healthcare is becoming unaffordable, overlooks the key issue, namely, why? The answer, as TAI has pointed out in the past, is that the patient neither knows nor cares what the services received really cost the insurance company and, hence, the employer. Ironically, ACA (which has nothing to do with employer-provided healthcare) provides the answer: high deductibles and, once the deductible is met, high co-pays up to a “catastrophic” limit.

    • Corlyss

      That’s basically rendering insurance a myth. SS is a myth for black men. Why? Because they pay and pay and pay into SS, and then die in their 60s. That’s what insurance is going to be in the future under Obamacare: you have to pay a high, often unaffordable deductible, then you have to pay a high, unaffordable co-pay. Meanwhile, because you’re incapacitated, you can’t work, so the money has to come from retirement savings. I don’t know how anyone, least of all the bleeding heart Democrats, get away with selling this as “insurance for all.” Alan Grayson needs to rethink his glib characterization of Republican health care plans (i.e., “Don’t get sick, but if you do, die fast.”

    • Jane the Actuary

      Actually, in the private sector, employers are indeed moving to high-deductible plans. I’m not sure how much difference this makes – or, specifically, how much healthcare spending there really is at these lower, controllable (do I see a dermatologist or by the OTC wart treatment?) levels, vs. the high spending once the deductible’s already been met. In any event, even in the high-deductible plans, patients still, by and large, lack the necessary information to act as true “consumers” able to comparison-shop on the best way to deal with non-emergency care.

      • Andrew Allison

        I agree that patients lack the information to act as true consumers but argue that if they were paying, e.g. the $4000 ACA deductible (rather than the more typical $250 of an employer-sponsored plan), the choice between the dermatologist and OTC treatment for a wart would be easy. As slightly off-topic side note, $50 primary care offices are proliferating in relatively high-cost Central Coast CA.

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