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Employer-sponsored healthcare premiums rose 5 percent this year

Deductible growth has exceeded wage increases in the last decade, a new survey finds

Photo (c) zimmytws - Getty Images
The cost of employer-provided family health coverage rose 5 percent in 2018 to an average of $19,616, while single coverage premiums rose 3 percent to $6,896, according to a survey released Wednesday by the Kaiser Family Foundation (KFF).

The annual survey, which drew on responses from more than 4,000 employers with three or more workers, found that workers are contributing an average of $5,547 toward the cost of family coverage while the rest is being paid by employers. For single coverage, workers are contributing roughly $1,200 a year.

Over the last decade, the general annual deductible for workers has climbed about eight times as fast as wages, Kaiser said. And with employer-sponsored health coverage being the most common form of health insurance in the U.S., that means more workers are pulling from their take-home pay in order to pay medical bills, despite having coverage.

Burden of deductibles

KFF found that premium increases exceeded both wage increases (2.6 percent) and inflation (2.5 percent) over the past year and decade. Moreover, employers are increasingly heaping more out-of-pocket costs onto employees.

The report said that 85 percent of workers have plans with deductibles compared to 81 percent in 2017 and 57 percent a decade ago.

“Health costs don’t rise in a vacuum. As long as out-of-pocket costs for deductibles, drugs, surprise bills and more continue to outpace wage growth, people will be frustrated by their medical bills and see health costs as huge pocketbook and political issues,” KFF President and CEO Drew Altman said in a statement.

Cognizant of the challenge posed by the current healthcare system, Amazon, Berkshire Hathaway, and JPMorgan Chase announced earlier this year that they were forming a joint venture to give their employees better health care choices and bring down costs.

In its report, Kaiser said it believed companies will soon need to find other ways to shift costs.

"If underlying healthcare prices and service use begin to grow as part of stronger economic growth, employer and health plans may need to look for tools other than higher cost sharing to address the pressures that would lead to higher premium growth," the authors wrote.

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