Drop In Employer Confidence In Health Care Benefits
The National Business Group on Health annual survey of large employers, conducted by Towers Watson is out (http://www.healthreformgps.org/wp-content/uploads/Towers-Watson-NBGH-201...). Excerpts:
Coni dence About the Long Term Fades
Economic conditions, frustration with high
cost levels and limited success in encouraging
employees to adopt healthier lifestyles have been
persistent challenges for companies. Against the
backdrop of health care reform, companies have
never been more uncertain about the future of their
health care programs over the long term.
For nearly a decade, Towers Watson has been
tracking employers’ coni dence in their ability to
sponsor health care benei ts for active employees
10 years into the future. Employer coni dence has
steadily deteriorated since 2007, despite health
care cost trends hovering at historically low rates
during the same period. With the health care
marketplace changing rapidly and parts of health
care reform already starting to take effect, employer
coni dence is at its lowest point (23%) since we
began tracking this data (Figure 13). That could
dramatically change if there is any interruption in
the implementation of the various components of
the PPACA. However, companies are much more
coni dent about the next i ve years than they are
about 10 years from now.
Affordability issues are a growing challenge
Trends remain double the rate of inflation. Employees’ share of premium costs increased 9.3% between 2011 and 2012, with the dollar burden rising from $2,529 to $2,764. In fact, employees contribute nearly 40% more for health care than they did five years ago, compared with 34% for employers. Likewise, out-of-pocket expenses increased over the last year from 16% to 18%. That increase is partly due to subsidy shifts for dependents, as nearly half of companies increased employee contributions in tiers with dependent coverage. About a quarter of companies (24%) are using spousal surcharges, with another 13% planning to do so next year.
Dr. McCanne's comment:
Health benefit programs of large employers have been the mainstay of health care coverage for working families. The Affordable Care Act relies heavily on the stability of these programs. However, only 23 percent of these employers are very confident that they will continue to offer health care benefits ten years from now.
Although this report discusses many observations and strategies for the future, one trend that is of concern is the greater reliance on high-deductible health plans with health savings accounts or health reimbursement arrangements (aka account-based health plans or ABHPs). Although these plans seem to be satisfactory for the healthy workforce and their young healthy families who really don't need much care, there remains the serious concern that such accounts deter patients with significant needs from receiving the care that they should have.
Quoting from this report, "An important question is whether ABHPs are having a positive or negative effect on employees’ utilization of health care services and ultimately on improving health outcomes. There are significant information gaps about health behaviors and outcomes for employees and dependents enrolled in an ABHP, compared with non-ABHPs."
The prevailing attitude seems to be that conditions in health care financing are so bad that we have to do something, no matter what.
My comment:
The Affordable Care Act depends upon large employers continuing to provide health benefits to employees and dependents. Whether that actually happens is uncertain. There has been a precipitous drop in large employer confidence about the future of employee health benefits in just the past few years. Apparently, even large employers are questioning the value of the private health insurance business model.
Dr. Joe Jarvis