Benefits January 23, 2008

Health Coverage Costs Up but Access is Historically Level

January 23, 2008 (PLANSPONSOR.com) - Data from the Employee Benefit Research Institute (EBRI) shows that even though employers are shelling out a lot more for health coverage, availability for workers has stayed mostly level in recent years.
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However, the biggest change is that the number of employers providing retiree health benefits has suffered a precipitous decline. EBRI said 12.7% of private-sector employers covered retirees in their policies in 2007, down sharply from the 21.6% which did so in 1997.

According to an EBRI news release,the cost of employment-based health benefits doubled from 2000 to 2007, while wages and overall inflation increased only 25%. The growth rate in the cost of providing health benefits fell from 13.9% in 2003 to 6.1% in 2007, but continued to run double that of workers’ earnings and the rate of overall inflation.

Workers also paid more for their share with average premiums for employee-only coverage increasing from $28 to $52 per month from 2000 to 2006, an 86% hike. Average family-coverage premiums increased from $138 to $248 per month from 2000 to 2006, an 80% increase.

While workers’ premiums payments increased, their percentage share in premium amounts decreased. According to EBRI,workers paid an average of 20% of the premium for employee-only coverage in 1993 while, by 2007, workers were paying 16%.

Workers paid more than 30% of consumer health care expenses out of pocket in the mid-1990s while, by 2005, worker out-of-pocket spending as a percentage of total consumer health care spending fell to 26%, EBRI said.

The EBRI data also showed that the number of covered employees is largely unchanged from the mid-1990s and only down slightly from the late 1980s. In 2005, 74% of workers who were not self-employed reported they were eligible for health benefits through their own job, up slightly from 73.6% in 1995.

Between 1994 and 2000, the percentage of workers with health benefits through an employer held steady between 73% and 75%. Since 2000, the percentage of workers with health benefits has fallen to about 71%.

Finally, EBRI said, take-up rates for employment-based benefits have fallen from nearly 88% in 1988 to 83.5% in 2005 among workers with benefits from their own employer, but fewer than 5% of workers eligible for health benefits were uninsured.

The full report is here .

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