Health “Reform” = Rising Costs, Rising Premiums, Losing Coverage
Towers Watson is out today with an annual survey from the National Business Group on Health about the state of employer-provided health care. The results are far from the outcomes Democrats promised when the health care law passed – but typical of the consequences millions of Americans have seen since it did:
Higher Costs: Average cost per active worker rose by 7.6% to reach $11,176 – an increase of nearly $800 in one year alone. The employee share of costs is projected to rise by double-digits, increasing 11.8% to $2,660.
Higher Premiums: “Over the last year, employers put more emphasis on increasing premium contributions” – 63% plan increases in employees’ share of premium contributions, and 62% plan premium increases for dependent coverage.
More Bureaucracy: A whopping 81% of firms said the health care law has increased administrative burdens on their human resources departments. One in six (16%) firms said the cost of complying with the law is one of their top challenges in maintaining affordable coverage.
Dropping Coverage Now: In 2012, more than one-quarter (26%) of companies plan to discontinue sponsoring a plan “for at least one segment of current and/or future retirees.”
Dropping Coverage Later: The number of firms reporting a high confidence that health care benefits will be offered at their organization 10 years from now dropped nineteen points in one year, to its lowest level since the survey began. More than one in three (35%) firms are currently re-visiting their health care strategy for current employees – meaning they could exit the market. The vast majority of surveyed employers believe the opening of the Exchanges in 2014 (70%) and the introduction of the “Cadillac tax” in 2018 (81%) will have at least some impact on their current employees. The report notes that “if the legislation works as intended,” it could “allow…companies to exit sponsorship” of retiree health coverage. Based on the survey results, it’s also not unrealistic to envision how the law could jeopardize employer coverage as a whole.