Health Care Costs: A Growing Burden for Employers and Workers

Health care costs are escalating, and employers are feeling the impact.

The Financial Strain

• 154 million people under 65 rely on employer-sponsored health insurance.
• Average annual premiums:
• Single coverage: $9,325 (5% increase from previous year)
• Family coverage: $26,993 (6% increase from previous year)

Employee Contributions

• Average employee contributions:
• Single coverage: 16% of the premium
• Family coverage: 26% of the premium
• Smaller employers (10-199 employees) are more likely to pay the entire premium for single coverage.
• Larger firms offer more support for family coverage, with employees contributing less.

Quality of Care Concerns

• Understaffing and industry consolidation have led to reports of decreasing quality of care.
• State and federal lawmakers are trying to address these issues, but their efforts are limited.

Employer Strategies

• Employers are struggling to manage rising costs.
• Strategies to control premiums often result in higher deductibles and out-of-pocket expenses for employees.
• Neither employers nor employees favor this approach, but it is often the only option.

Challenges for Smaller Firms

• Smaller firms are more likely to have employees contributing a larger share of the premium for family coverage.
• 29% of employees at smaller employers are in plans where they contribute more than half of the premium.

The Complex Health Care Landscape

• Employers, especially larger ones, often lack the bargaining power to negotiate better rates.
• Industry consolidation and lack of control over rising prices further complicate the situation.
• Federal government's recent spending cuts on Medicaid shift the burden to states and do little to address rising health care costs.