Employer Health Coverage Reaches $20,000 Per Family

 

If you’re one of the 155 million Americans whose employer provides your healthcare insurance, you probably have no idea what it’s costing. But rest assured, you’re paying the bill – indirectly.

Anna Wilde Mathews, writing in The Wall Street Journal, says the average cost of employer health coverage offered to workers rose to nearly $20,000 for a family plan this year. This information comes from a survey of employers by the Kaiser Family Foundation. Annual premiums rose 5% to $19,616 for an employer-provided family plan in 2018.

Employers tried to blunt this increase by boosting the deductibles that workers must pay out of their pockets before insurance kicks in. This practice lets them reduce premium costs, shifting more of the cost to workers.

Nationwide, workers paid $5,547 a year on average in premiums for a family plan in 2018, according to the Kaiser employer survey. That represents 29% of the total premium cost. For an individual plan, the average total premium cost was $6,896 in the 2018 or 3% higher than last year, with workers paying 18% of the total.

ObamaCare premiums have steadily risen since implementation of the ACA in 2014. After double-digit increases for several years, next year’s rates appear to be stabilizing as this graph depicts:

This stabilizing trend was discussed in an earlier post, Healthcare Premiums Stabilizing – Finally! But this stabilizing trend for individual premiums may not be experienced by the employer-provided insurance market.

What accounts for these rising premium costs?

A report issued earlier this year by the Health Care Cost Institute, a non-profit, said that between 2012 and 2016, health spending growth tracked in insurer claims from employer-sponsored coverage “was almost entirely due to price increases,” for services including emergency-room visits, surgical hospital admissions and administered drugs. Utilization of most health care services remained unchanged or declined.

Other research linked rising health care prices to mergers that have brought together large hospital systems, often combined with an array of doctors and other types of health care providers. Mergers generally reduce competition and lead to higher prices.

Rising employer healthcare costs means employees pay more for their healthcare – and get fewer wage increases. This explains why wages have remained relatively stagnant despite the growing economy. Employers are experiencing growth in production and sales but rising healthcare costs have prevented many from passing on these increased revenues to employees.

This is more evidence that Congress must provide us with a better healthcare system that produces higher quality at lower costs. Only a market-driven system that incentivizes patients to be more pro-active about their healthcare, rewards transparency in pricing and quality in treatment, and removes government regulations that artificially drive up costs, can provide that.

BernieCare For All

 

With the Kavanaugh confirmation process thankfully behind us, all eyes are now on the coming mid-term elections. Surveys show the economy and healthcare are the two issues of greatest interest to voters. Since the economy is booming that issue is solidly in the Republicans’ favor. That leaves healthcare as a toss-up issue.

Senate Minority Leader Chuck Schumer declared recently that health care is the issue that will define the November elections. Obviously he’s hoping it will bring victory for Democratic candidates.

But just as the Kavanaugh confirmation process ultimately may prove advantageous to voter turnout for Republicans, the Democratic message on healthcare may be a GOP winner. President Trump has certainly picked up that theme in an Op-ed written for USA Today in which he said, “Democrats would gut Medicare with their planned government takeover of American health care.”

This rhetoric takes a page from the usual Democratic play-book which stresses the politics of fear, especially for seniors.

Senator Bernie Sanders of Vermont nearly won the Democratic presidential nomination in 2016 on a platform of socialism including government takeover of healthcare he calls Medicare For All. He has introduced a bill by the same name which has been endorsed by 16 senators including leading 2020 presidential contenders Cory Booker, Kamala Harris, Kirsten Gillibrand, and Elizabeth Warren.

A companion bill in the House has 120 co-sponsors, which is nearly two-thirds of the current Democratic caucus. Also on board are Democratic gubernatorial candidates such as Gavin Newsom (California) and Andrew Gillum (Florida).

Despite this strong list of endorsement of socialized medicine in the Democratic leadership, Democrats claim Trump’s message is unfair because not every candidate has endorsed the single-payer plan. This suggests they are ashamed to admit (at least for now) this is their healthcare plan of the future.

Single-Payer Was Always the Plan

For those who have been paying attention to healthcare reform for years, this is disingenuous at best and deceitful at worst. Here is what I wrote in my book The ObamaCare Reality in 2014:

“It is well known that leading Democrats favor the socialized models of health care. No less than President Obama, Senate Majority Leader Harry Reid, and House Minority Leader Nancy Pelosi, are all on record as favoring single-payer or socialized medicine systems. They have admitted they would have pushed such a program for the United States if it were politically feasible when reforming our health care system during the debate in Congress in 2009 and 2010.”

 

ObamaCare was always a compromise for Democrats – better than the status quo but not achieving the complete government take-over of healthcare they favored. But they realized it was the best they could do. Their long-term hope has always been the collapse of ObamaCare and the implementation of single-payer healthcare to replace it when the political winds are favorable.

The Price of BernieCare

The Trump Op-ed quoted the work of the Mercatus Center’s Charles Blahous, former Social Security and Medicare trustee, who conservatively estimated the cost of BernieCare at $32.6 Trillion in the first ten years. The Wall Street Journal editorial board says that spending figure amounts to 10.7% of GDP in 2022 when the plan kicks in and then up from there! To put this in perspective, national defense spending (often derided as too expensive and wasteful) is a mere 3% of GDP today.

Blahous says, “Doubling all currently projected federal individual and all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”

WSJ says, “Liberals are griping that these estimates overlook what would be a decline in overall health spending, but Blahous goes out of his way to credit savings that would probably be illusory such as lower drug costs. As in every socialist system, the real “savings” would come from price controls and wait lists for many healthcare services. Have a cold? Come on in. A hip replacement or breast reconstruction? Get in line.”

They also say that’s the good news! “The truth is that BernieCare would essentially blow up the entire current health system. The Sanders bill would eliminate employer-sponsored insurance, which now covers some 150 million Americans. The sales pitch for that should be: If you like your healthcare plan, we won’t let you keep it.”

These are not outlandish claims by partisan observers. This is exactly what you get in any socialized medicine system in the world. Great Britain, Canada and Sweden all experience diminished quality of healthcare and severe delays in access to healthcare with similar systems. Each has recently had to approve private treatment of patients with government funding to alleviate unacceptable waiting times.

Democrats should continue their promotion of Medicare For All at their peril. Even Senator Sanders’ home state of Vermont had to reject this idea when it became obviously unaffordable and a recent referendum on single-payer in the blue state of Colorado was rejected by 80 percent of voters.

 

Democratic Efforts to Deny Healthcare Fail

 

Legislation intended to deny access to affordable healthcare for millions of Americans was just rejected in the U.S. Senate. This mean-spirited legislation was introduced by Democrats and defeated by Republicans.

Every Democratic senator plus Republican Senator Collins of Maine voted to rescind new Trump administration rules that expand consumer protections in short-term limited duration (STLD) plans. By the narrowest of margins, Republicans defeated the bill, 50 – 50.

The Trump administration has been finding ways to improve ObamaCare (Trump Improvements in ObamaCare Helping Millions) but Democrats want to go back to the disastrous Obama administration rules. The Obama rule governing these plans limited them to three months. The National Association of Insurance Commissioners complained that, since people can’t reenroll in ObamaCare for nine months each year, the Obama rule exposed the sick to higher premiums and denied care.

Michael Cannon, director of health policy studies at the Cato Institute, explains:

“Suppose you purchased short-term coverage in January and were diagnosed with cancer in February. Under the Obama rule, you’d lose your coverage at the end of March. When you reapplied for a short-term plan, insurers would either quote a sky-high premium or (more likely) refuse to cover you. With ObamaCare’s next enrollment window nine months away, you could face nine months of expensive treatment with no insurance – if you got treated at all.”

 

The new Trump rules expand these STLD plans to twelve months and permit renewals for up to 36 months. This guarantees continuous coverage until the next ObamaCare enrollment period – and beyond. The rule permits insurers to offer stand-alone “renewal guarantees” that allow enrollees who become sick to keep paying low, healthy person premiums for as long as they stick with short-term plans. By keeping expensive patients out of ObamaCare’s risk pools, this lowers ObamaCare premiums for everyone.

The Democrats’ claim that short-term plans hurt patients with pre-existing conditions “doesn’t exactly make sense,” reports The Washington Post.

The plain truth is that Democrats do not want to fix ObamaCare. They refused to repeal it when Republicans tried – and they refuse to improve it with modifications that meet the needs of millions of Americans. They really want ObamaCare to fail – but not until they have the support they need to pass their beloved single-payer healthcare known as Medicare For All.

Surveys reveal the two subjects of highest interest in the upcoming mid-term elections are the economy and healthcare. Democrats are losing the economy issue with 4% GDP growth and record setting lows for unemployment. But they hope to win on healthcare. With legislative efforts like this one, they could easily lose the healthcare debate as well.