Employers Cut Back on Health Coverage While Healthcare Spending Rises

An annual poll of employers, by the Kaiser Family Foundation and the Health Research & Educational Trust, shows the cost of employer health coverage increased about 4% last year, while the cost of employer coverage for an individual was up 2%. In 2013 and 2014, premiums for a family went up 4%.

“We’re in a period of historic moderation in premium costs,” Drew Altman, chief executive of the Kaiser Family Foundation told the Wall Street Journal in a recent interview.

Related Post: Why Insurance Rates Are So High and How to Start Cutting Them

The cause of the slowdown is a debate among economists. Some argue it’s closely tied to the recession and its aftermath, while others believe the change is due higher deductibles and other ACA-mandated changes in health coverage.

According to the study, many employers considered changing coverage for retirees. In order to cut back, employers may change work schedules, since those who work fewer than 30 hours a week don’t count toward ACA non-insurance coverage penalties.

On the contrary, national health spending is projected to pick up this year. It is expected to increase 5.6% in 2014 and 4.9% in 2015.

Related Post: Higher Deductibles Shift Health Costs To Employees

Future healthcare spending is an important component of the federal budget, especially as the government expansion of Medicare impacts federal healthcare spending.

Even with the upturn of the economy, the recession has likely continued to play a large part in medical spending.

Read more here.

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