Employees Not Benefiting From Slower Growth in Healthcare Costs

American workers already struggling with stagnant wages are being saddled with higher medical bills even as employers reap the benefits of a sustained slowdown in the growth of healthcare costs, a new report indicates.

While employees’ insurance premiums and out-of pocket medical expenses shot up 21% from 2007 to 2013 to an average of $3,273 a year, employers’ total healthcare costs rose only 14.5%.

“Almost everyone in the health system is realizing savings, but employees’ costs are rising,” noted the new report from the Center for American Progress, a left-leaning Washington think tank.

Public opinion surveys regularly show affordability as a top healthcare concern for Americans. That is one of the reasons many policymakers hoped the slowdown in healthcare costs would bring some relief.

Overall healthcare spending in the U.S. has risen at the slowest pace on record in recent years.

The Center for American Progress report, provided exclusively to the Los Angeles Times, offers additional evidence this slowdown is not helping workers, however.

Researchers analyzed national survey data from the federal Agency for Healthcare Research and Quality that measure how much employers and employees pay for health plans that workers get through their jobs.

They also looked at data gathered from major health plans by the Health Care Cost Institute on how much employees pay in co-pays, deductibles and other out-of-pocket health spending.

Employers still pick up the lion’s share of workers’ health costs, paying more than two-thirds of the average worker’s insurance premium in 2013, or $7,238, according to the report.

But the employer share is shrinking.

At the same time, workers’ out-of-pocket costs are rising as employers boost deductibles and co-pays in the health plans they offer.

From 2007 to 2013, the average worker’s annual out-of-pocket medical spending rose to $800 from $665, researchers found.

This trend is particularly troublesome at a time when paychecks are stagnating, said Topher Spiro, the center’s vice president for health policy and lead author of the report. “This issue is critically important to address the squeeze middle-class families are facing,” he said in an interview.

The report suggests three potential responses. These include: requiring employers to more clearly tell employees how costs are rising in their health plans; mandating that employers return some savings to workers if employers’ costs rise more slowly than overall healthcare costs; and expanding employees’ access to primary care visits that are not subject to cost-sharing.

Spiro acknowledged that large employers and major employer groups are unlikely to back any additional requirements.

But he said that increased focus on the issue may put pressure on employers, just as sustained calls to raise the minimum wage may have influenced decisions by Wal-Mart Stores Inc. and other businesses to boost pay.

“This is an issue that needs to be on the table,” Spiro said.

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