Mercer conducted a survey, the National Survey of Employer-Sponsored Health Plans, which showed that the median deductible required by employers for individual coverage in PPO health plans jumped to $1,000 in 2008. Last year’s median deductible was $500. Since PPOs are the most popular type of health plan coverage with 69% enrollees of all covered employees, it is hard to believe that in just 8 years deductibles have risen from $250 to $1,000. The survey includes private and public employers with 10 or more employees. PPO deductibles remain lower for larger employers, with a median deductible at about $300.
Some findings from the survey include:
§ Employers held health benefit cost increases to about 6 percent in 2008 for a fourth straight year – but that has meant shifting more cost to employees
§ Consumer-directed health plans are offered by 20 percent of large employers, up sharply from 14 percent last year
§ More large employers add incentives to encourage health-conscious behavior
§ Employers shed retiree medical plans in 2008, but with health reform looming there was no further erosion of active employee plans
But not only are health insurance deductibles rising, but so are premiums. For coverage that is getting meager, premiums have rose 5% in the last year. Premiums for family coverage have increased to $12,680 and premiums for single coverage have increased to $4,704. Though the 5% increase is fairly low, experts say it is not going to last and it can be considered high when deductibles are increasing as well. Health insurance premiums have shot up 5x faster than workers’ wages since 2000. Since 2000, there has been a 78% rise in premiums from $6,672 in 2000 and $12,680 in 2008.
The rise in health care costs has put a strain on family budgets. These higher health care costs and the decline in the economy have forced families to go without needed prescriptions, preventive care, and tests and doctors’ visits.
Julia Eisman at Families USA‘s Stand Up for Health Care blog writes:
“The economic downturn coupled with ever-rising health care costs has had serious consequences for many of us, but unlike the financial sector, working Americans can’t expect a government bailout. Instead, more individuals are incurring oppressive medical debt (more than half of bankruptcies are now due, at least in part, to problems with medical costs) and many Americans have joined the ranks of the underinsured and uninsured.”
So with Obama’s win, what does that mean for healthcare in the upcoming years?
Experts say that because of the financial crisis we are facing today, health care changes are more likely to be phased in over time. But over time we are likely to see an expansion on existing private and public program with help of federal subsidies and mandates. Obama has also repeadly states that the reforms he will impose will lower a family’s health insurance premiums by about $2,500 a year.
These reforms include:
- Requiring employers, except small businesses, to provide health insurance to their employees or contribute to the cost.
- Requiring that all children have health insurance.
- Expanding Medicaid and the State Children’s Health Insurance Program (SCHIP).
- Creating a National Health Insurance Exchange to pool risk and give people the choice of competing private or public health plans.
Karen Davis, President of the Health Policy and Research Group Commonwealth Fund, states that “We can’t afford to stay on the path we are on with regard to total health spending,” she says. “Employers can’t afford it, the government can’t afford it, and individuals can’t afford it. It is just not sustainable.”