According to CNN Money, the cost of employer-sponsored health insurance plans rose by just 4.1 percent this year, representing the lowest increase in employer health expenditures in 15 years. Premiums have continued their upward trend since the Bush Administration, but their rate of increase has seen a decline under President Obama, while government programs such as Medicare Advantage have actually seen a net reduction in premium costs.
Although the latest figures on employer-sponsored health insurance premiums are encouraging, they are largely a result of employers simply shifting health care costs onto their employees by increasing workers’ contributions to health coverage and offering expensive, risky “high-deductible health plans.” Employers have been engaging in a misleading blame-game, citing Obamacare as an excuse for their shoddy cost-shifting practices when they are actually just trying to squeeze out extra profits:
Increasingly, employers are offering plans that charge significantly lower premiums but require employees to cover more out-of-pocket costs like higher deductibles. These consumer-directed health plans, or CDHPs, carry premiums that are about 20% less than other types of plans, making them much more affordable for employers, Mercer said.
Even among traditional health care plans, employee costs are increasing with the average deductible at large employer plans climbing by about 13% to $666, and at small employers rising by 3% to $1,452.
“Employers are very aware that in 2014, when the health reform law’s provisions kick in, they will be asked to cover more employees and face added cost pressure,” said Julio A. Portalatin, CEO of Mercer. “They’ve taken bold steps to soften the impact and it’s paying off already.”
While this is one way for employers to reduce their share of health care expenditures, it comes at the expense of workers. So-called “consumer-driven” health plans have lower premiums but significantly higher deductibles — which means that in the face of a chronic medical need, employees could potentially be forced to choose between paying exorbitant out-of-pocket medical costs or forgoing care. Even though these plans typically have low satisfaction rates among subscribers, industry leaders widely agree that the trend toward health plans with high deductibles will continue for the foreseeable future.
Studies have found that Obamacare will actually decrease small businesses’ health care expenditures while raising large employers’ costs only modestly. Nevertheless, large employers still continue to use the health reform law as a convenient and misleading excuse to pay lower wages, move workers to part-time status, and generally shift their costs onto the backs of their employees. Even aside from the argument that employers may have an ethical responsibility to to safeguard their workers’ physical and fiscal security by providing them with health coverage, businesses’ focus on their short-term bottom lines might actually come back to haunt them — since companies that offer full benefits typically have higher worker retention rates and draw more highly-skilled labor pools.