Most Americans receive health insurance through their employers, but many have little idea of how much the coverage costs them or the boss.
An annual survey of employers released Tuesday supplied the answer: If you are an average American worker, the total annual premium for you and your family will be $16,351 this year. Your boss is paying about two-thirds of that, and your share comes to $4,600.
The price climbed 4 percent this year — a modest increase compared to years past. But it may not seem modest to workers facing higher out-of-pocket costs, fewer benefits and stagnant paychecks. For example, companies are increasingly offering higher-deductible plans that shift costs onto workers. The average deductible for all workers this year is $1,135 — an increase of 94 percent since 2006, according to the report released Tuesday.
“You think twice whether you have that $1,800 scan because you have to pay for it,” said Tony Holmes, a partner in the Atlanta office of global consulting firm Mercer.
The nonprofit Kaiser Family Foundation’s survey covered more than 2,000 companies nationwide, but the results did not offer a state-by-state breakdown. Separate federal data for Georgia shows that workers paid an average of slightly less than $4,500 for family coverage last year, nearly the same as the average cost nationwide this year.
2014 may not bring much relief, insurance experts say, with companies predicting the Affordable Care Act will continue to raise their health costs as final key elements of the law kick in.
The relatively low growth in premiums in recent years creates some “breathing room” for companies trying to reduce health care costs without making radical changes that could hurt employees, said Kaiser CEO Drew Altman.
“They should not be dramatically cutting workers’ benefits,” Altman said.
Like their employees, however, companies have watched health-care costs shoot up nearly three times faster than wages and inflation during the past decade, according to Kaiser.
Much of that dynamic stems from a still-flagging economy, spurring Americans to pinch pennies and spend less on their health care.
Employees will likely also have to spend more out-of-pocket for their health care as employers face new costs tied to the Affordable Care Act, experts say.
Employers across the country say they’ve already seen health costs increase up to 5 percent because of elements of the law that have already taken effect, such as the provision that enables young adults to stay on their parents’ insurance until age 26, Holmes said. Many large employers are planning for similar increases next year with the law’s continued implementation.
Wellness programs aimed at cutting cost by keeping employees healthier will come with bigger financial incentives — and penalties — as companies try to save, Holmes said.
The tax on so-called “Cadillac” health plans that takes effect in 2018 is a major concern that has more employers planning to move workers into high-deductible plans and add health management programs, among other changes, according to a Mercer survey.
“Employers are moving faster now that they see the changes going on and they see the costs ahead of them,” Holmes said.
It’s still unclear exactly how the health care law will affect the millions of Americans who get their coverage through work.
Starting Jan. 1, insurance companies will no longer be allowed to reject people with pre-existing conditions, such as diabetes or hypertension, who are more costly to cover. Critics of the law say those extra costs will eventually be passed on to businesses and consumers.
Meanwhile, companies with the equivalent of at least 50 full-time workers will face a $2,000-per-employee fine if they don’t provide affordable health coverage as determined by the government. The penalty won’t kick in until 2015 after the Obama administration in July delayed it by one year.
Still, the law’s opponents say workers could be hurt as companies try to cut costs.
“President Obama repeatedly assured Americans that his health care law would lower costs, which the Kaiser survey indicates is clearly not occurring,” said Georgia Congressman Phil Gingrey of Marietta. “Together with employers decreasing hours and shifting employees to part-time work as a result of Obamacare, families simply can’t afford higher costs.”
The law’s supporters, however, argue Kaiser’s findings simply reiterate why Congress needed to pass the Affordable Care Act in the first place. Small employers who want to offer coverage will have more options, as well as individuals who don’t get insurance through work, said Tim Sweeney, a health policy analyst with the Georgia Budget & Policy Institute.
“As (health care) becomes more expensive, fewer businesses can offer it and more people don’t have coverage,” he said. “The old system wasn’t meeting the needs of individuals and of employers.”