Improving and strengthening employer-sponsored insurance
- Collection:
- Health Policy and Services Research
- Contributor(s):
- Bipartisan Policy Center, issuing body.
- Publication:
- Washington, D.C. : Bipartisan Policy Center, October 2022
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Cost Control Health Benefit Plans, Employee -- organization & administration United States
- Genre(s):
- Technical Report
- Abstract:
- Employers play a vital role in funding and supporting the U.S. health care system. As of 2019, 58.1%i of non-elderly Americans--158 million in total--received health care benefits through their employers, making it the United States’ largest source of health coverage today. These employers include small, medium, and large companies, although larger ones are more likely to offer health benefits: About half of small firms offer ESI, while nearly all companies with 1,000 workers or more do so. Intended to serve as a recruitment and retention tool, ESI has been a popular employee benefit. Nonetheless, ESI is quickly becoming financially untenable for both employers and employees, due to rising health care costs. These increases make it difficult for employers to maintain benefits, constraining real wages and increasing financial barriers to critical health care services for employees and their families. To make matters worse, the reverberating impact of the COVID-19 pandemic is placing added financial pressures on the health care delivery system. Staff shortages, as well as an over-burdened and in some cases shrinking workforce, are contributing to systemwide stress and labor cost increases that are being passed onto payers and, ultimately, to employer-sponsored plans. Family premiums for ESI have increased 54% and deductibles 162% since 2009. This rise is outpacing both inflation and wage growth, which have increased 26% and 20%, respectively, over the same time frame. A recent analysis from Aon estimated that ESI premiums could grow 6.5% in 2023. Nearly 30% of employees now face deductibles of $2,000 or more--almost four times the percentage of employees who faced such deductibles in 2009. Despite significant bipartisan concern and the long-standing nature of these issues, stakeholders and policymakers have not made meaningful progress on slowing the growth. Even as of the early 1990s, personal health care spending was growing at twice the rate of disposable income, and excess medical pricing was a problem. Congress has made few legislative changes to health care--and ESI, specifically--as sweeping as the now 12-year-old ACA. Although the private sector has deployed innovative models, policy solutions are necessary to correct for market dynamics that are outside the control of employers and other payers. Individual employers--even larger ones with geographically dispersed staff--have very little leverage to influence provider or insurer behavior. As such, federal strategies to address health system cost drivers and offer employers payment and pricing tools are critical to improving and strengthening the nation’s ESI system. With these tools at their disposal, employers and other stakeholders have the potential to create a higher value ESI system that improves outcomes and constrains health care cost growth.
- Copyright:
- The National Library of Medicine believes this item to be in the public domain. (More information)
- Extent:
- 1 online resource (1 PDF file (62 pages)) : illustrations
- Illustrations:
- Illustrations
- NLM Unique ID:
- 9918557287206676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918557287206676