Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Insurance
April 15, 2019 03:47 PM

Employer market may be the next political healthcare challenge

Susannah Luthi
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Getty Images

    The poorest employer-insured families spend nearly one-fifth of their income on average on premiums and co-pays if not everyone on their plan is healthy.

    If everyone's healthy, that same family would spend about 13% of their income on premiums and out-of-pocket health costs. As family incomes grow, their rate of healthcare spending decreases, according to new analysis by the Kaiser Family Foundation and the Peterson Center on Healthcare.

    The authors Gary Claxton, Bradley Sawyer and Cynthia Cox argued the trend could be part of "what is fueling interest in proposals like Medicare-for-all and options for employers and/or workers to buy into Medicare."

    For healthcare experts, the finding doesn't say much that's surprising. But it draws attention to the overall trajectory.

    "The affordability trends in the employer market are driven by healthcare costs rising a lot faster than the median income," said Sara Collins, vice president of healthcare coverage and access at the Commonwealth Fund.

    The Commonwealth Fund through its Biennial Health Insurance Survey has tracked how employer insurance benefits have grown skimpier since 2003. The number of adults deemed underinsured on their employer plans has nearly tripled between then and 2018.

    Meanwhile, employer-insured families who spent enough on healthcare to meet their deductibles saw their expenses nearly double as a percentage of their income over the past decade.

    Premium and deductible costs have also risen to nearly 12% of the median income in 2017, up from nearly 8% in 2008.

    Collins said the implications of these higher costs raise "a fundamental dilemma for employers" as their employees are becoming more likely to skip a doctor's visit or a prescription.

    "They're designing benefits to shift more costs to the employees, potentially undermining the productivity of their employees," she said.

    Joseph Antos of the American Enterprise Institute criticized the thesis of the Kaiser paper as stating the obvious: that healthcare spending, like any spending, will always represent a higher percentage of a poor person's income than it will for someone who earns more.

    But he also advocated for a fix to the disparity between what rich people and poor people have to pay out in terms of their earnings, which stems from the employee insurance tax benefit known as the tax exclusion.

    "The idea of providing a subsidy to encourage people to get coverage on the job may not be a bad idea, but the way it's been implemented is to favor high-wage workers not low-wage workers," Antos said. "It's inefficient and not fair. We should be helping lower-wage workers first."

    Growing discontent within the employer market could pose the strongest political threat to the status quo of coverage.

    Since most Americans get their health insurance coverage through work, conventional wisdom holds employer-sponsored insurance as the bulwark against a complete overhaul like Medicare for All, which got a big push in the 2016 presidential election from Sen. Bernie Sanders (I-Vt.).

    While it's still considered a political long shot, the policy has entered the political vernacular. Last week, insurance stocks tumbled after Sanders re-introduced his Medicare for All legislation.

    Sanders is running for president, and the bill's co-sponsors include other Democratic presidential contenders in the upper chamber—Sens. Kamala Harris of California, Elizabeth Warren of Massachusetts, Cory Booker of New Jersey, and Kirsten Gillibrand of New York.

    As a pre-emptive measure, the industry-backed Partnership for America's Health Care Future is running a six-figure media campaign to push back against Medicare for All as well as various public option proposals.

    On the other side of the political spectrum, the industry is also trying to block cost-cutting efforts from the Trump administration and Congress: from a site-neutral payment policy for hospitals, to an international reference pricing model for pharmaceutical manufacturers, and elimination of drug rebates to pharmaceutical benefit managers.

    While Democratic leadership is focused on Obamacare as opposed to Medicare for All or other proposals, the cost issues haven't been solved yet there either. Premiums remain high for people who don't qualify for subsidies. Democrats want to boost insurance subsidies for more people across higher income levels, as the government's costs for the exchange markets have continued growing.

    Collins, who suggested policy options that include a fix to the "family glitch" in the ACA and requiring employers to restrict high-cost drugs from coverage, said that any funding boost for coverage "absolutely needs to be paired with efforts to lower underlying costs."

    "And the major culprits are provider prices and prescription drugs," she said.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Clawbacks
    Insurance companies ramp up efforts to claw back money from providers
    Feds take aim at prior authorization
    Feds take aim at prior authorization
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing