Page 30 - Modern Healthcare (January 2020)

Satisfaction with
employer-based coverage
not guaranteed
MERRILL GOOZNER Editor Emeritus
olls suggest most working-age Americans are satisfied with their employer-based
health insurance. That could easily change when this deficit-fueled economic
Pexpansion ends, as it inevitably will.

A poll conducted last fall by the Com- having to pay the first $1,400 expenses in healthcare costs has increased work-
monwealth Fund showed 48% of the out-of-pocket in an individual plan or ers’ take-home pay. Rather, their total
privately insured were “very satisfied” $2,800 in a family plan—has reached out-of-pocket spending continues to
with their healthcare coverage. Anoth- 46% of the privately insured. That’s up rise much faster than wages.
er 38% said they were “somewhat satis- from 17% a decade ago. While many This brings me to a final point. Some
fied.” Only Medicaid ranked higher. large employers subsidize health sav- healthcare economists claim that “out-
It’s understandable why most workers ings accounts when they make the of-pocket” costs aren’t a problem since
like their plans. They rarely use them. switch to a high-deductible plan, those they have remained stable at about 10%
It’s the inverse of the 20-80 rule, which funds are quickly exhausted by a seri- of total healthcare spending. But that ig-
predicts 20% of the population will con- ous illness. nores premiums, which, as we just saw,
sume 80% of healthcare services. That HSAs are particularly inadequate for are climbing rapidly; and it ignores that
means 80% of the public is responsible people with chronic conditions, which most out-of-pocket spending falls dis-
for 20% of spending. Indeed, half the now affect 4 out of every 10 Americans. proportionately on the very sick, who
population accounts for just 3% of total The high deductible must be paid anew have few options.
healthcare consumption—a mere $276 every year. We know what happens when sick
a year on average. people are confronted with higher co-
No employer should take solace from There’s also a hidden drain on pays and deductibles. They stint on care
satisfaction ratings that are based on un- household finances from rising pay- with little capacity to distinguish be-
familiarity with the system. That support check premiums for employer-based tween high-value and low-value care.
could evaporate in an instant. coverage. Last year’s Kaiser Family Employers across the country are
It’s already fraying. A large majority of Foundation employer survey showed aware of these problems. Over the past
these healthy breadwinners aren’t fret- the average premium for a family-based couple of years, the share of workers
ting over out-of-pocket spending since plan reached $20,576. Workers paid forced into high-deductible plans has
they pay so little. They’re far more wor- $6,015 or 30% of the total out of their plateaued. Some employers are forging
ried about the portion of premiums that paychecks. That’s 10% of the median innovative partnerships with providers
come directly out of their paychecks. household income. to work on lowering costs.
Moreover, recent trends in employ- That total has edged up over the last But when the economy hits its next
er-based coverage have put millions decade as employers shifted a growing rough patch, as it inevitably will, isn’t
of families at risk of unaffordably high share of total costs onto workers. Their it likely that employers, who already
expenses. They are joining the millions premiums shot up 7.1% a year on aver- subsidize public programs, will resume
more—the 20% of people with serious ill- age over the decade compared with just shifting more of their own costs onto
nesses—who are already feeling the pain. 4.8% for the employer share. their workers? That’s when we’ll find out
The number of employees in high- Enough numbers. The bottom line is if the public is truly committed to em-
deductible plans—defined in 2019 as simple. None of the recent moderation ployer-based coverage. l

26 Modern Healthcare | January 27, 2020