The Great Cost Shift

8/9/2019 The Great Cost Shift

1/31 WWW.AMERICANPROGRESS.O

The Great Cost ShiftWhy Middle-Class Workers Do Not Feel

the Health Care Spending Slowdown

By Topher Spiro, Maura Calsyn, and Meghan OToole March 2015


2/31

The Great Cost ShiftWhy Middle-Class Workers Do Not Feel

the Health Care Spending Slowdown

By Topher Spiro, Maura Calsyn, and Meghan OToole March 2015


3/31

1 Introduction and summary

3 Measuring the value of health benefits

5 Trends in employers and employees health care costs

10 Consequences of rising employee costs

12 Policy recommendations to reduce cost shiftingand improve affordability

19 Conclusion

20 About the authors

21 Appendix A

24 Appendix B

26 Endnotes

Contents


4/31

1 Center for American Progress |The Great Co st Shift

Introduction and summary

In recen years, he growh in overall healh care coss has slowed dramaically. Bu

or millions o Americans wih employer-sponsored insurance, or ESI, his slowdown

is illusory. From 2008 hrough 2013, he average annual growh rae o employees

monhly premium conribuions and ou-o-pocke expenses, adjused or inflaion,

was more han double ha o average annual growh in real per-capia naional

healh care spending, which was less han 2 percen per year.1* Tis growh has also

oupaced employers coss o offering hese benefis by more han 40 percen.2

Employees experiencing higher healh care coss end o blame he Affordable

Care Ac, or ACA, even hough he law largely leaves he employer-based sysem

alone.3In ac, many employers repor ha he ACA has had only a negligible

influence on heir healh care coss.4

Te acual reason why employee and employer coss are increasing a differen raes

is because employers have, over ime, shifed greaer responsibiliy or healh care

expenses o heir employees hrough higher deducibles, higher copaymens, and

higher coinsurancea pracice ha began long beore he passage o he ACA.

Oher employers pay smaller shares o heir employees healh care premiums.

o some degree, his long-erm cos shifing has conribued o he overall healh care

slowdown.5Increased cos sharing discourages he use o healh careindividuals

end o spend less on heir healh care when hey are subjeced o higher ees or

deducibleswhich has lowered overall healh care spending. Employees wih

higher cos sharing are more likely o avoid or delay even beneficial and cos-effecive

care.6Employers, insurers, and public healh care programs benefi rom hese

savings, while individual employees wih significan healh care needs ace greaer

ou-o-pocke coss. Employees have increasingly repored ha heir healh carecoss are unaffordable.7In oher words, almos everyone in he healh care sysem

is realizing savings, bu employees coss are rising.

* The data cover the period from 2007 through 2013, but annual growth rates are calculated for 2008through 2013 because the data for years prior to 2007 are not available.


5/31


Unlike changes o wages, which are sraighorward and ransparen, hese ypes

o changes o employees healh benefis can be hard o undersand, making

cos-shifing effors difficul or employees o deec. For his reason, he Cener

or American Progress recommends he ollowing hree reorms:

Increased ransparency abou employers and employees healh care cossand savings

Shared savings rebaes o limi cos shifing o employees

educing employees cos-sharing burdens by expanding he ACAs ree

prevenive-services benefi

Tese reorms will allow millions o Americans wih ESI o benefi rom he

slowdown in healh care spending. I employers ask heir employees o shoulder

a greaer share o heir healh care coss, employees also should share in heresuling savings.


6/31


Measuring the value

of health benefits

Employer-sponsored healh insurance is he mos common orm o healh insurance

in he Unied Saes. In 2014, 55 percen o firms offered healh insurance o heir

employees, and 149 million nonelderly Americansabou hal o all Americans

obained healh insurance hrough heir employers.8Among firms ha offer healh

insurance, 62 percen o employees are covered by heir employers healh insurance.

Tese offer and coverage raes have remained consan in recen years.

ypically, employers ha offer healh insurance pay he majoriy o heir employeeshealh insurance premiums as par o heir oal compensaion package. Employees

are usually responsible or a porion o he premiums, bu ha amoun varies

significanly. Te Kaiser Family Foundaion ound ha he average employee

premium conribuion in 2014 was $1,081 or single coverage, wih 20 percen o

employees paying less han $64960 percen o he averageand 31 percen o

employees paying more han $1,513140 percen or more o he average.9

Employees are also responsible or ou-o-pocke coss ha hey pay direcly or

healh care services, such as o heir docors and or iems such as prescripion drugs.

Ou-o-pocke coss include deducibles, copaymens, and coinsurance. A deducible

is he amoun paiens owe or covered healh care services beore he healh

insurance plan begins o pay any coss. Copaymens are a fixed amoun$20, or

exampleha an individual pays or a covered healh care service, such as a visi

o he docor, usually a he ime o service. Coinsurance is a percenage share o

he coss o a covered service ha individuals mus pay.10For example, afer a person

mees his or her deducible amoun and he plan begins o pay or healh care

services, a coinsurance rae o 20 percen means ha he person will sill pay 20

percen o he cos o a paricular iem or service.

Te Affordable Care Ac capped he ou-o-pocke coss or individuals and amilies

enrolled in nongrandahered healh care plansboh or employer-sponsored

insurance and insurance purchased in he new Markeplaces. Tis requiremen covers

he majoriy o hose wih ESI; 74 percen o covered employees were enrolled in

nongrandahered plans in 2014, which was up rom 44 percen in 2011.11Te


7/31


annual limis in 2015 are $6,600 or an individual plan and $13,200 or a amily

plan.12Premiums, ou-o-nework expenses, and spending on noncovered benefis

do no coun oward meeing he cap.

How much an individual will acually pay ou o pocke or healh care varies

significanly based on he srucure o he healh insurance plan, he use o services,and he ypes o services used. Plans wih lower monhly premiums usually have

higher deducibles and ou-o-pocke coss, and plans wih higher monhly

premiums usually have lower deducibles and ou-o-pockes coss. Tereore,

plan designs are more or less suiable or differen individuals based on how many

healh care services hey are likely o need. For example, an individual wih a

chronic condiion ha requires requen medical appoinmens and muliple

prescripion drugs would likely be beter served by a plan ha has higher monhly

premiums bu lower cos sharing.

Tere are counless variaions on healh insurance cos-sharing requiremens,which is one o he reasons why comparing healh care opions is exraordinarily

conusing or consumers. Acuarial value, or AV, is a calculaion ha deermines

he value o a specific plan, and i can be used o compare differen healh care

benefi designs and heir relaive generosiy.13

Te AV compares he value o he healh care iems and services covered by a plan

or a ypical enrollee and how much o hese coss he individual enrollee will bear,

excluding premium conribuions rom he employer and employee and including

any employer conribuions o healh savings accouns.14In oher words, he AV is

he percenage o average oal coss or covered benefis ha he plan will cover in

a year. For example, i a plan has an AV o 80 percen, hen he employeei he or

she uses an average amoun o healh carecan expec o pay ou o pocke abou

20 percen o he oal coss o covered services each year, as well as monhly

premiums. Te acual percenage o coss ha individuals pay depends on he

services ha hey use.

Under he ACA, all plans sold on he ederal and sae Markeplaces are caegorized

by a meal levelbronze, silver, gold, or plainumha corresponds o heir AVs

o 60, 70, 80, or 90 percen. Tese meal levels help consumers compare plans wihvery differen benefi designs. For example, wo plans wih differen deducible

and coinsurance amouns or covered services may boh have an AV o 80 percen.

Te firs has a $0 deducible bu 30 percen coinsurance or hospializaions. Te

second has a $1,000 deducible bu 10 percen coinsurance afer he deducible is

me or hospializaions.


8/31


Trends in employers and

employees health care costs

Healh care coss have moderaed in recen years; healh spending has grown a a

low rae or he pas our years, and 2011 was he firs ime in a decade ha spending

on healh care grew more slowly han he U.S. economy. 15However, spending is

sill rising and proving o be unsusainable or boh employers and employees.

Undersandably, employers have been experimening wih ways o conrol heir

coss. For example, some employers ry o incenivize consumers o choose more

high-value and necessary medical care hrough he use o high-deducible healhplans, he consequences o which are deailed laer in his repor.16A growing

number o employers have insiued wellness programs o improve employees

healh in reurn or incenives such as premium discouns or cash rewards. Ye he

evidence so ar shows ha hese programs do no save money and usually do no

improve healh.17

o look a how employers healh care decisions are affecing employees, we analyzed

oal healh care coss, employers healh care coss, and employees healh care coss

rom 2007 hrough 2013, per enrollee, using daa rom he Healh Care Cos

Insiue, or HCCI, and he Insurance Componen o he Medical Expendiure

Panel Survey, or MEPS.18All coss cied below are real and adjused or inflaion in

2013 dollars. Te mehodology and daa are urher described in Appendix A.


9/31


Disproportionate burden of health care costs on employees

Te oal cos per enrollee o employer-sponsored insurancepremium

conribuions rom boh employers and employees and ou-o-pocke coss

increased rom he previous year every year rom 2009 hrough 2013, and here was

a sligh decrease o less han 1 percen in 2008. Beween 2007 and 2013, he oalper-capia cos increased 16.5 percenrom $9,026 o $10,512.19

Tese cos increases have no been shared equally beween employers and

employees. As Figure 1 shows, employees coss increased by 21.1 percen beween

2007 and 2013, while coss or employers only rose by 14.5 percen. In his period,

employees coss grew aser han overall coss, while employers coss grew more

slowly han overall coss. Tis rend in cos shifing rom employers o employees

is even more obvious rom 2011 o 2012, when employees coss increased by 2.1

percen as employers coss acually decreased by 0.5 percen.20

FIGURE 1

Change since 2007 in employees' and employers' health care costs per

enrolled employee, in 2013 dollars

Source: Authors' calculations based on Health Care Cost Institute, Out-of-Pocket Spending Trends (2013) (2014), available at

http://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdf; personal communication from Amanda Frost, senior researcher,Health Care Cost Institute, Washington, D.C., October 28, 2014; Agency for Healthcare Research and Quality, "Medical Expenditures PanelSurvey: Insurance Component," available at http://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsp (last accessed January 2015).

See Appendix A for details.

-5%2007 2008 2009 2010 2011 2012 2013

0%

Employees' costs

Employers' costs

5%

10%

15%

20%

25% 21%

14%


10/31


Employees costs

Figure 2 shows a summary o employees increasing coss by year. In 2013, he

average employee paid $3,273 in healh care coss. Increases in employees premium

conribuions have accouned or he majoriy o he growh in employees coss

each year.21

FIGURE 2

Health care costs for employees with employer-sponsored insurance,

in 2013 dollars

Source: Authors' calculations based on Health Care Cost Institute, Out-of-Pocket Spending Trends (2013) (2014), available at

http://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdf; personal communication from Amanda Frost, senior researcher,Health Care Cost Institute, Washington, D.C., October 28, 2014; Agency for Healthcare Research and Quality, "Medical Expenditures PanelSurvey: Insurance Component," available at http://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsp (last accessed January 2015).

See Appendix A for details.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2007

$665

$2,037

2008

$2,095

$671

2009

$2,171

$714

2010

$2,253

$749

2011

$2,370

$760

2012

$2,415

$780

2013

$2,473

$800

Average out-of-pocket costs Average premium contribution

Employers have no compensaed employees or heir rising healh care coss wih

wage increases. In ac, wages ell during his period, urher compounding he

problem o rising healh care coss. Among all amilies, he median real income

acually ell by $5,116 beween 2007 and 2013rom $68,931 o $63,815.22* As a

resul, he average American worker has el pinched by boh sagnaing wages and

increasing healh care coss.

* These data differ slightly from CAPs Middle Class Squeeze report, which uses different methodologyfor calculating median income.


11/31


Premium contributions

Premium conribuions are growing aser or employees han or employers.

From 2007 hrough 2013, employees premium conribuions increased by 3.3

percen per year, on average. Employers premium conribuions increased a a

lower rae o 2.3 percen per year, on average, and even had negaive growh raesin wo o hese years.23Employees premiums will coninue o grow: Almos

wo-hirds o companies surveyed in 2012 and 2013 said ha hey planned o

increase employee premium conribuions.24Wih privae exchanges and defined-

conribuion plansunder which employers give each employee a fixed dollar

amoun o purchase insuranceprojeced o become much more common in

uure years, his rend will only ge worse.25

Out-of-pocket costs

Employees ou-o-pocke coss also increased every year rom 2007 hrough 2013,

averaging 3.1 percen growh per year. In 2013, he average employee wih ESI paid

$800 ou o pocke.26However, his average ou-o-pocke esimae undersaes he

financial burden or some workers and oversaes i or ohers. Some workers will ace

ew or no ou-o-pocke coss, while hose wih greaer healh care needs will have

much higher coss ha can resul in significan financial srain. Addiionally, as people

end o reduce heir use o healh care services when hey have higher cos sharing,

ou-o-pocke coss may be rising or he same or a less amoun o reamen.27

High-deducible plans wih lower premiums and high deducibles$1,000 or

single coverage and $2,000 or amily coveragearge firs-dollar expendiures and

can resul in significan ou-o-pocke expenses in he early par o he benefi year

or in he iniial sages o an illness. Primary care, prescripion drugs, and oupaien

services are mos commonly affeced, so individuals who need hose services will

likely pay a significan porion o heir deducible. Because young children end o

use more primary care services han oher paiens, hese ypes o benefi designs

can be paricularly problemaic or heir amilies and can someimes discourage use

ha urns ou o be cos effecive.28Similarly, oher cos-sharing requiremens shif

coss o less healhy employees. For example, requiring coinsurance insead ocopaymens or expensive specialy drugs can increase cerain employees coss by

housands o dollars per monh.


12/31


Ou-o-pocke expenses have risen no jus because overall healh care coss have

grown bu also because employers are increasingly selecing plans or heir

employees ha include hese ypes o cos-sharing srucures. Tese rends will

coninue: 77 percen o companies repored in 2012 and 2013 ha hey plan o

increase cos sharing using deducibles and copaymens.29

For example, he prevalence and amoun o deducibles have risen seadily. Te

percen o privae-secor employees who were enrolled in a plan wih a deducible

grew rom 48 percen in 2002 o 81 percen in 2013.30

As Figure 3 shows, he real amoun o he average deducible or employees wih

ESI more han doubled beween 2002 and 2013, rom $578 o $1,273 or single

coverage and rom $1,240 o $2,491 or amily coverage. Tis increase in cos

sharing hrough higher deducibles has conribued o he slowdown in healh

care cos growh over he pas ew years.

FIGURE 3

Average deductible in plans with deductibles at private-sector

establishments, in 2013 dollars

Source: Agency for Healthcare Research and Quality, "Medical Expenditures Panel Survey: Insurance Component," available athttp://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsp (last accessed January 2015).

$500

$02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$1,000

$1,500

$2,000

$2,500

Family coverage

$1,240

$2,491

$578

$1,273

Single coverage

High-deducible plans have become much more common. In 2014, 18 percen o

covered workers were enrolled in plans ha had a deducible o $2,000 or more,compared wih only 3 percen in 2006.31According o he Naional Business Group

on Healh, one-hird o large employershose wih more han 50 ull-ime-

equivalen employeesplan o offer only high-deducible healh plans in 2015.32


13/31

10 Center for American Progress |The Great Co st Shif t

Consequences of

rising employee costs

Employers choose benefi designs wih greaer cos sharing no only o lower heir

own coss bu also o encourage employees o be more cos conscious. When

consumers ace higher ou-o-pocke coss, hey may reduce unnecessary healh care

and shop around or he highes value and bes deal or necessary care. Tereore,

enrollmen in a high-deducible healh plan may be a good idea or some employees.33

Te RND Corporaion ound ha amilies who swiched rom a radiional healh

plan o a high-deducible healh plan spen abou 20 percen less on healh care in

he nex year han amilies who remained in radiional plans.34

However, high deducibles and oher cos sharing increase he risk o adverse

healh oucomes and can make healh care unaffordable, especially or hose wih

low o moderae incomes or wih chronic healh care needs.

esearch has ound ha higher cos sharing and high-deducible plans induce

consumers o reduce or delay heir use o prevenive care, such as immunizaions and

cancer screenings, even when hese services are covered wih no cos sharing.35wo

ou o five aduls wih high deducibles compared wih heir income repored ha

hey had delayed or declined needed care because o heir deducible.36High ou-o-

pocke coss are also associaed wih nonadherence o medicaion.37Furhermore,

even hough high-deducible plans are designed o incenivize paiens o choose

high-value services, consumers ofen do no receive he inormaion ha hey need

o allow hem o make hese ypes o inormed choices abou heir healh care.38

Tis cos shifing also has placed grea financial pressure on many employees. In a

Commonwealh Fund survey, 13 percen o aduls wih privae insurance repored

ha hey had deducibles o 5 percen or more o income, and low- and moderae-

income aduls were even more likely o have high deducibles relaive o income.39

O hese aduls, 43 percen said ha heir deducible was somewha, very difficul,

or impossible o afford. Almos one-hird, 29 percen, o privaely insured aduls

wih a deducible o 5 percen or more o heir income repored ha hey had

skipped a medical es, reamen, or ollow-up visi recommended by a docor


14/31


because o heir deducible.40Paiens who are responsible or significan cos

sharing have also been shown o reduce heir spending on oher essenial goods,

including ood and clohing.41

Tese findings call ino quesion wheher hese cos-shifing sraegies will acually

resul in susainable long-erm savings and wheher consumer welare coulddecrease as a resul. Te healh o individuals who do no ollow heir prescripion

regimens or who delay prevenive care could deeriorae, necessiaing uure

cosly hospializaions or reamen.


15/31


Policy recommendations to

reduce cost shifting and improve

affordability

An employees oal compensaion can be defined as he sum o ake-home salary,

he employers healh insurance premium conribuion, and oher benefissuch

as reiremen benefis or paid ime offminus he employees healh insurance

premium conribuion and ou-o-pocke expendiures. Tereore, when employees

healh care cosspremiums and ou-o-pocke cossrise aser han employers

premium conribuionsholding all oher pars o compensaion equalhe

value o he employees oal compensaion alls. Currenly, a lack o ransparency

prevens many, i no mos, employees rom recognizing when heir employershealh care coss are growing a a lower rae han heir own. As long as healh care

coss coninue o grow and changes in healh benefis are difficul or employees o

deec, employers who wish o shif coss o heir employees can do so quiely,

shielded by his lack o ransparency.

o proec consumers, he Affordable Care Ac placed a limi on ou-o-pocke

coss or individuals enrolled in new healh insurance plans, which was an

imporan sep oward proecing individuals rom excessive ou-o-pocke coss.

However, he curren limis are quie high and do no preven addiional cos

shifing up o hose amouns. For example, even wih he ACAs ou-o-pocke

limis in place, an employee earning $30,000 could sill spend almos one-hird o

his or her income on healh care expenses.* Te law also requires ha prevenive

care be covered or ree wih no cos sharing, which offers imporan, ye sill

limied, financial help o paiens.

* CAP analysis used the out-of-pocket maximum limit for an individual in 2015 of $6,600 and amaximum annual premium contribution of $2,850, which is 9.5 percent of the income of $30,000.The ACA defines affordable ESI as premium contributions for single coverage not exceeding 9.5percent of income. See Patient Protection and Affordable Care Act, H. Rept. 3590, 111 Cong. 2 sess.

(Government Printing Office, 2010).


16/31


Te ollowing hree proposals would build on he ACAs proecions:

Changes in employees healh care coss should be more ransparen. Employers

should provide employees wih an annual noice ha describes any changes in

he disribuion o premium conribuions and/or acuarial value.

In cerain limied siuaions, employers should share savings realized rom

significan cos shifing and changes o AV ha decrease employees oal

compensaion and increase he risk o high ou-o-pocke coss.

Te ACAs ree prevenive-services benefi should also include hree primary

care visis each year.

Increased transparency: Annual notice to employees

Employees can easily noice changes o heir wages or o heir premium

conribuions, which are deduced rom paychecks. However, i is very difficul or

mos employees o know how heir employers premium conribuions are

changing relaive o heir own and o ully undersand how changes in he design

o heir plans may affec heir ou-o-pocke coss or save heir employers money.

Because employer-offered healh insurance plans are no currenly caegorized a

he same meal levels o AV as plans offered on he ederal and sae Markeplaces,

i is also challenging or employees o compare differen healh insurance plans

and realize how much o heir coss hey are being asked o cover. Greaer rans-

parency can empower employees o beter undersand heir healh care expenses

and help hem make healh care decisions, preven employers rom concealing any

changes in oal compensaion, and encourage employers o share savings wih

heir employees.

Te ACA requires employers o provide employees wih a Summary o Benefis

and Coverage during each open enrollmen period, or new hires, and upon he

reques o an employee. Tis documen is inended o provide consumers wih

clear, consisen and comparable inormaion abou heir healh plan benefis and

coverage.42

Supplemening he Summary o Benefis and Coverage wih a consumer-riendly noice on he relaive changes o employers and employees premium

conribuions over he upcoming year and he AV o he plan will provide much-

needed ransparency. As par o he noice, plans AVs should be classified according

o he ACA meal levels.


17/31


Te new noice would include he ollowing:

Premium amountsincluding growh in premium conribuions and he

percen conribued by employers and employees

Actuarial value of the plan

including any change in he AV and meal level ohe plan

An example o his annual noice is shown below:

Dear Employee,

Tis year, the total monthly premium or your health insurance plan was $X.

Currently, you contribute $Y per month (yy percent o the total), and we

contribute $Z (zz percent o the total).

Starting January 1, 2015, the total monthly premium or your health insurance

plan will be $XX. Your monthly contribution will be $YY (yyy percent o the total,

an increase/decrease o yyyy percent fom last year), and we will contribute $ZZ

(zzz percent o the total, an increase/decrease o zzzz percent fom last year).

Your current plan is a bronze/silver/gold/platinum/in between levels [level

specified] plan and has an actuarial value o A percent. Tis means that, on average,

A percent o your covered benefits will be paid or by the planand you will be

responsible or x percent through your deductible, copayments, and coinsurance.

You are also responsible or paying or noncovered services and or services that

you receive fom a doctor, hospital, or other health care provider who is not

participating in the plan. Te actual percentage o costs that you will pay this

year depends on the services that you need during the year.

In 2015, the actuarial value or your plan will be B percent, which categorizes

the plan as a bronze/silver/gold/platinum/in between levels [level specified]

plan, and is an increase/decrease o y percent fom 2014.

Please contact the benefits manager or any questions about your health

insurance plan.


18/31


Employers may also change he insurance plan or all employees or offer a new plan

opion. A second example o he noice or hese scenarios is shown in Appendix B.

Tis annual noice would be required o all businesses and would add litle

adminisraive burden, as all businesses are required o provide he Summary o

Benefis and Coverage and o calculae he inormaion necessary or he noiceeach year already.

Shared health care savings with employees

Depending on how businesses choose o ackle he challenge o rising healh care

coss, heir employees may also benefi. For insance, many businesses have

adoped reorms aimed a lowering coss or boh employers and employees while

improving heir employees healh. ransparency rom annual noices should

encourage hese ypes o reorms; employees will be able o beter assess changesin heir oal compensaion and o compare heir coss o heir employers coss,

and employers will have a greaer incenive o make sure ha heir employees

benefi rom changes in heir healh care benefis.

ransparency will also allow employees o recognize when heir employers are

benefiing rom changes ha are leaving hem less well off financially. For example,

some employers may decrease heir premium conribuions or change heir

benefi designs, such as ransiioning all employees o high-deducible plans, and

no compensae employees in any way or he addiional risk and higher ou-o-

pocke coss.

In more exreme cases, i an employers healh care coss grow a a significanly

lower rae han oher businesses coss because i shifed coss o is employees,

he employer should compensae employees wih a shared savings rebae. Te

shared savings rebae would be a porion50 perceno any savings ha resul

rom changes o he srucure o heir healh insurance plans or rom requiring

greaer employee premium conribuions. Tis requiremen would sill allow

employers o experimen wih ways o conrol healh care coss and reain a porion

o savings bu would ensure ha employees also share in he savings.

Employers would pay he shared savings rebae when heir average healh care

coss per enrollee were lower and he average enrolled employees coss were

higher han he saes rend in average healh care coss per enrollee in large group

plans. Employers would have o share hal o heir savings on healh care coss

beyond he saes rend wih heir employees. A buffer zone would limi shared


19/31


savings rebaes o siuaions in which average coss or employers are a leas 1

percenage poin lower and average coss or employees are a leas 1 percenage

poin higher han he saes rend.*

Tis policy would apply only o large firmsdefined as hose wih more han 50

employeesas is consisen wih he ACAs definiion o large employers. Employersand employees average per-enrollee coss would be measured rerospecively using

annual premium amouns and average ou-o-pocke coss per enrollee based on

claims daa.**Te Deparmen o Healh and Human Services would publish he

saes rends in coss or he large group marke, as i has saed ha i is monioring

he rends and raes in his marke as par o he rae review process.43Alernaively,

he Deparmen o Healh and Human Services or he Deparmen o Labor could

come up wih a differen mehod o calculae each saes rend.

Tese calculaions would no add much adminisraive burden, as employers or

hird-pary adminisraors already have daa on he coss o healh care benefisclaims daa, he AV o heir plans, and he share o premiums paid by employers

and employees. Te shared savings rebae would be adminisered in a similar way

as he medical loss raio rebaeemployers would provide employees wih direc

compensaion or apply he savings o reduce employees uure premium paymens.

Te ollowing wo examples illusrae siuaions where he shared savings rebae

would ake effec. Firs, in 2014, an employer offered one healh insurance plan

wih an AV o 85 percen. Te employer conribued $2,964 in premiums annually

per enrollee wih individual coverage. Each enrolled employee wih individual

coverage paid $1,000 annually or premiums and was responsible or an average o

$700 in ou-o-pocke coss.***

Les assume ha he oal coss per enrollee a he company increase 3.5 percen in

2015. Te employer coninues o pay $2,964 per enrolled employee, while keeping

he AV o he offered plan he same. Te overall cos growh means ha employees,

on average, will pay $724 in ou-o-pocke coss in 2015 and heir premium

conribuions mus increase 13.9 percen o $1,139. Te ou-o-pocke and premium

increases mean ha oal employees coss increase by 9.6 percen, compared wih

* The Department of Labor could also decide that an alternative to the 1-percentage-point buffer zone ismore appropriate after a full analysis of the data.

** The states trends and employer and employee costs for individual and family coverage also should becalculated separately to make sure employers do not shift costs between the different coverage options.

*** Claims data would provide the average out-of-pocket costs in practice, but for this example, $700 is a

calculation of 15 percentbased on 85 percent AVmultiplied by the total cost per employee, $4664.


20/31


he 0 percen increase or he employer. A he end o he year, i is calculaed ha

he saes rend in healh care coss also increased by 3.5 percen, which means ha

he employer is saving money on healh care coss relaive o rend and by more han

he buffer zone, and he employees cos increase is ouside he buffer zone as well.

Tereore, he employer would pay a shared savings rebae. As a comparison, heshared savings rebae would no have aken effec i he employers coss had grown

by even 2.5 percenhe difference beween he saes rend, 3.5 percen, and he

buffer zone, 1 percenage poino $3,038. Because he employers coss have no

grown by 2.5 percen, he shared savings rebae amoun per enrolled employee is

$37hal o he difference beween $3,038 and $2,964, he acual employers cos

per enrolled employee in 2015.

TABLE 1

Illustrative example: Employees premium contribution increases

2014 2015 Growth rate

Total costs per enrollee $4,664 $4,827 3.5%

Employees premium contribution $1,000 $1,139 13.9%

Employees average out-of-pocket costs $700 $724 3.4%

Total cost to employees $1,700 $1,863 9.6%

Employers premium contribution per enrollee $2,964 $2,964 0.0%

States trend 3.5%

Rebate amount $37

A second example is one where, when aced wih coss per enrolled employee

increasing by 3.5 percen rom 2014 o 2015, he employer chooses o reduce he

AV o is healh plan insead o increasing premium amouns. In such a scenario,

even i premium conribuions decrease or boh employers and employees, he

shared savings rebae may sill apply because employees are a risk o much higher

ou-o-pocke coss. For insance, i he AV o he plan decreases rom 85 percen

o 80 percen; employees premium conribuions decrease by 10.2 percen, rom

$1,000 o $898; and he employers premium conribuions say he same, a $2,964,

he shared savings rebae will ake effec. elaive o he saes rend o 3.5 percen,he employees oal growh rae is 9.7 percen, and he employers growh rae is 0

percen. Te rebae amoun comes o $37 per enrolled employee.*

* As in the first example, $37 is half of the difference between the employers actual 2015 costs, $2,964,and the employers 2014 costs increased by 2.5 percentthe 3.5 percent state trend minus the

1-percentage-point buffer zoneor $3,038.


21/31


TABLE 2

Illustrative example: Actuarial value decreases

2014 2015 Growth rate

Total costs per enrollee $4,664 $4,827 3.5%

Employees premium contribution $1,000 $898 -10.2%

Employees average out-of-pocket costs $700 $964 37.9%

Total cost to employees $1,700 $1,863 9.7%

Employers premium contribution per enrollee $2,964 $2,964 0.0%

States trend 3.5%

Rebate amount $37

Reduced cost sharing for primary care visits

A hird policy soluion o reduce he pressure o higher ou-o-pocke coss onconsumers is o address he affordabiliy o specific healh care services. Te ACA

requires healh plans o provide a wide range o prevenive services wih no cos

sharing rom coinsurance, copaymens, or deducibles.44Lawmakers should

expand he ree prevenive-services benefi o include hree primary care visis per

year or all individual and group healh plans. Tis could be paricularly helpul or

parens wih young children who may need o see heir pediaricians relaively

requenly.45For example, hese no-cos visis could be very helpul during flu

season i parens needed o ake heir sick child o he docor.

Tis policy would allow people access o imporan primary care services wihou

cos and would ensure ha consumers received valuable healh care benefis

beore spending up o housands o dollars on heir deducibles and oher cos

sharing. I also complemens he exising prevenive healh benefi; i will improve

paiens healh and decrease coss by creaing a healhier populaion and reaing

illnesses sooner raher han laer. High-qualiy primary care has been shown o

improve care coordinaion, qualiy o services, and healh oucomes, as well as

conain coss.46emoving barriers o accessing primary care will especially benefi

amilies wih young children and people wih chronic illnesses, who end o use

more primary care services.47


22/31


Conclusion

ising healh care coss remain a challenge or employers, bu wihou he policy

changes oulined in his repor, employers are likely o coninue o keep a

disproporionae amoun o he savings hey realize rom increasing cos sharing and

oher cos-conainmen effors. Increasing ransparency so ha employees know

when cos shifing occurs is an imporan firs sep, bu more aggressive reorms

offer addiional proecions o employees by guaraneeing ha hey receive a leas

some benefi rom employers cos-saving measures and have easier access o

imporan healh services.


23/31


About the authors

Topher Spirois he Vice Presiden or Healh Policy a he Cener or American

Progress.

Maura Calsynis he Direcor o Healh Policy a he Cener.

Meghan OTooleis he Policy Analys or he Healh Policy eam a he Cener.


24/31


Appendix A

Methodology

In order o compare employers healh care coss o employees healh care coss,

we used daa rom he Healh Care Cos Insiue and he Agency or Healhcare

esearch and Qualiy, or AHQ.48HCCIs annual repors on he healh care coss

o individuals under age 65 who are covered by employer-sponsored insurance

provide a measure o per-capia ou-o-pocke expendiures or he years 2007

hrough 2013.*Tese daa do no include ou-o-pocke expenses or whichconsumers did no submi a claim; consequenly, per-capia ou-o-pocke coss

are likely underesimaed. AHQ adminisers he annual Medical Expendiure

Panel Survey, which provides daa on average premiums per employee by ype o

coverage, employee premium conribuions, and deducible amouns or employ-

ees o privae-secor esablishmens in he surveys Insurance Componen. We

calculaed an average premium conribuion or employees and employers using

weighed averages o premium amouns and he percen o employees enrolled in

single, employee-plus-one, and amily plans. MEPS did no collec hese daa in

2007, so we averaged he premium and deducible amouns or 2006 and 2008 o

produce an esimae or coss in 2007. Anoher common source or annual premium

and deducible amouns is he Kaiser Employer Healh Benefis Survey. We used

MEPS insead o he Kaiser survey because MEPS provided he percenage o

employees enrolled in individual, employee-plus-one, and amily coverage, which

was necessary or calculaing an average premium amoun per employee.

* HCCIs data is based on fee-for-service health care claims from four of the largest health insuranceproviders. HCCI defines out-of-pocket expenditures per capita as payments made directly to ahealth care provider by the insured, including any copayments, coinsurance payments, and

deductible payments. Any health care payments made out-of-pocket for which a claim was not filed(such as over-the-counter medicines), are not included in this metric. Out-of-pocket expendituresper capita are calculated by dividing total out-of-pocket expenditures by the insured population.

See Health Care Cost Institute, 2012 Health Care Cost and Utilization Report (2013), available athttp://www.healthcostinstitute.org/2012report.


25/31


By combining he HCCI and MEPS daa, we creaed a measure o employees coss

per capiaemployees premium conribuions plus ou-o-pocke expenses

and compared i wih employers coss per enrolled employeeemployers premium

conribuions. Overall coss per capia or he ESI marke are he sum o he

employees and employers coss.

We adjused all amouns or inflaionin 2013 dollarsusing he Consumer

Price Index esearch Series Using Curren Mehods, or CPI-U-S, o accuraely

compare coss across years.49A summary o he daa appears in he able below.


26/31


TABLE A1

Employer and employee health care costs, 20072013, in 2013 dollars

2007 2008 2009 2010 2011 2012 2

Out-of-pocket costs

Out-of-pocket expenditures per enrolled employee $665 $671 $714 $749 $760 $780

Growth rate

Out-of-pocket expenditures per enrolled employee 0.9% 6.4% 5.0% 1.5% 2.6% 2

Premium costs per enrolled employee at private-sector establishments

Average premium amount per enrolled employee $8,361 $8,275 $8,768 $9,087 $9,545 $9,556 $

Average employee premium contribution $2,037 $2,095 $2,171 $2,253 $2,370 $2,415 $

Average employer premium contribution per enrolled employee $6,323 $6,180 $6,597 $6,835 $7,174 $7,141 $

Growth rate

Average premium amount per enrolled employee -1.0% 5.9% 3.6% 5.0% 0.1% 1

Average employee premium contribution 2.8% 3.6% 3.8% 5.2% 1.9% 2

Average employer premium contribution per enrolled employee -2.3% 6.7% 3.6% 5.0% -0.5% 1

Combined premium and out-of-pocket costs

Total out-of-pocket expenditures and premium costs per enrolled

employee$9,026 $8,946 $9,481 $9,836 $10,305 $10,336 $1

Total out-of-pocket expenditures and employee premium contribution per

enrolled employee$2,702 $2,766 $2,884 $3,002 $3,131 $3,196 $

Employer premium contribution per enrolled employee $6,323 $6,180 $6,597 $6,835 $7,174 $7,141 $

Growth rate


employee-0.9% 6.0% 3.7% 4.8% 0.3% 1


enrolled employee 2.4% 4.3% 4.1% 4.3% 2.1% 2

Employer premium contribution per enrolled employee -2.3% 6.7% 3.6% 5.0% -0.5% 1

Growth from 2007


employee-0.9% 5.0% 9.0% 14.2% 14.5% 1


enrolled employee2.4% 6.7% 11.1% 15.8% 18.3% 2

Employer premium contribution per enrolled employee -2.3% 4.3% 8.1% 13.5% 12.9% 1

Deductibles

Percent of private-sector employees enrolled in a plan with a deductible 68.6% 70.7% 73.8% 77.5% 77.8% 79.6% 8

Average deductible for employees with single coverage $889 $940 $996 $1,095 $1,163 $1,184 $

Average deductible for employees with family coverage $1,690 $1,794 $1,913 $2,110 $2,299 $2,356 $

Note: All amounts are adjusted for inflation and are in 2013 dollars.

Source: Authors calculations based on Health Care Cost Institute, Out-of-Pocket Spending Trends (2013) (2014), available at http://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdf; personal commufrom Amanda Frost, senior researcher, Health Care Cost Institute, Washington, D.C., October 28, 2014; Agency for Healthcare Research and Quality, Medical Expenditures Panel Survey: Insurance Component, a

http://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsp (last accessed January 2015).


27/31


Appendix B

Below is an example o he annual noice or scenarios where employers change

heir insurance plans or offer a new plan opion.

Dear Employee:

In 2014, you were enrolled in current plan name. Te total monthly premium or

that plan was $X. Currently, you contribute $Y per month (yy percent o thetotal), and we contribute $Z (zz percent o the total).

Starting January 1, 2015, we are changing your health care plan/offering a new

option [depending on i there is an option].

Current plan name

New plan name

[I there is the option to stay in current plan] I you stay in current plan name,

the total monthly premium or your health insurance plan will be $XX. Your

monthly contribution will be $YY (yyy percent o the total, an increase/decrease

o yyyy percent fom last year), and we will contribute $ZZ (zzz percent o the

total, an increase/decrease o zzzz percent fom last year).

New plan name will have total monthly premiums o $L. Your monthly

contribution will be $M (m percent o the total, an increase/decrease o mm

percent fom last year), and we will contribute $N (n percent o the total, an

increase/decrease o nn percent fom last year).

Current plan name is a bronze/silver/gold/platinum/in between levels [level

specified] plan and has an actuarial value o A percent. Tis means that, on

average, A percent o your covered benefits will be paid or by the planand you


28/31


will be responsible or x percent through your deductible, copayments, and

coinsurance. You also are responsible or paying or noncovered services and or

services that you receive fom a doctor, hospital, or other health care provider

who is not participating in the plan.

[I there is the option to stay in current plan] In 2015, the actuarial value orcurrent plan name will be B percent, which categorizes the plan as a bronze/

silver/gold/platinum/in between levels [level specified] plan and is an increase/

decrease o y percent fom 2014.

New plan name is a bronze/silver/gold/platinum/in between levels [level

specified] plan and has an actuarial value o R percent, an increase/decrease o

S percent fom 2014. Tis means that, on average, R percent o your covered

benefits will be paid or by the plan.

[I there is an option or a new plan] I you elect to change your health insuranceplan, you will have the opportunity to do so during the open enrollment period.

Please contact the benefits manager or any questions about your health

insurance plan.


29/31


Endnotes

1 Council of Economic Advisers, 2014 Economic Report ofthe President (Executive Office of the President, 2014),available at http://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdf.Authors calculations of premiumcontributions are from the Medical Expenditure PanelSurvey, and their calculations of out-of-pocket costs arefrom the Health Care Cost Institute; see Appendix A formore details.

2 Authors calculations of MEPS and HCCI data.

3 Constantine Von Hoffman, Obamacare Blamed forIncreases in In surance Costs, CBS News, January 8,2014, available at http://www.cbsnews.com/news/obamacare-blamed-for-increases-in-insurance-costs/.

4 Linda J. Blumberg and others, Implications of theAffordable Care Act for American Business (Washington:Urban Institute, 2012), available at http://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdf; Jeffrey Young,Companies Predict Small 2015 Health Cost Rise with aCatch, HuffPost Business, August 13, 2014, available athttp://www.huffingtonpost.com/2014/08/13/employer-health-insurance_n_5673039.html?1407938784; NationalBusiness Group on Health, 2015 Large Employers HealthPlan Design Changes Sur vey Report (2014), availableat https://www.businessgrouphealth.org/.

5 Alexander J. Ryu and others, The Slowdown In HealthCare Spending In 2009-11 Reflected Factors Other Than

The Weak Economy And Thus May Persist, Health Affairs32 (5) (2013): 835840; Council of Economic Advisers,2014 Economic Report of the President.

6 Martin Sipkoff, Higher Copayments and DeductiblesDelay Medical Care, A Common Problem for Americans,Managed Care, January 2010, available at http://www.managedcaremag.com/archives/1001/1001.downstream.html.

7 Sara Collins and others, Too High a Price: Out-of-Pock-et Health Care Costs in the United States (New York:

The Commonwealth Fund, 2014), available athttp://

www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costs.

8 Kaiser Family Foundation, Employer Health Benefits:2014 Annual Survey (2014), available at http://files.kff.org/attachment/2014-employer-health-benefits-survey-full-report.

9 Ibid.

10 For definitions of deductible, copayments, andcoinsurance, see Healthcare.gov, Glossary, availableathttps://www.healthcare.gov/glossary/ (last accessedOctober 2014).

11 Kaiser Family Foundation, Employer Health Benefits:2014 Annual Survey.

12 Healthcare.gov, Out-of-pocket maximum/limit, available

athttps://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/(last accessed October 2014).

13 American Academy of Actuaries, Actuarial Value Underthe Affordable Care Act (2011), available athttp://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdf.

14 Timothy Jost, Implementing Health Reform: EssentialHealth Benefits, Actuarial Value, And Accreditation,Health Affairs Blog, November 21, 2012, available athttp://healthaffairs.org/blog/2012/11/21/implement-ing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/.

15 Anne B. Martin and others, National Health SpendingIn 2012: Rate Of Health Spending Growth RemainedLow For The Fourth Consecutive Year, Health Affairs33(1) (2014): 6777.

16 Al Dobson and others, Health Care SpendingSlowdown: The Consumer Paradox (Vienna, VA:Dobson DaVanzo & Associates, LLC, 2014), available athttp://fahpolicy.org/wp-content/uploads/2014/07/Dobson-DaVanzo-Federation-Cost-Sharing-Report.pdf.

17 Jayne ODonnell, How far is too far for work wellnessprograms to go?, USA Today,August 12, 2014, availableathttp://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/; Austin Frakt and Aaron E. Carroll, DoWorkplace Wellness Programs Usually Work? Usually Not,

The Upshot, September 11, 2014, available athttp://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.html.

18 Health Care Cost Institute, Out-of-Pocket SpendingTrends (2013) (2014), available at http://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdf;personal communication from Amanda Frost, seniorresearcher, Health Care Cost Institute, Washington, D.C.,October 28, 2014; Agency for Healthcare Research andQuality, Medical Expenditure Panel Survey: InsuranceComponent, available at http://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsp (last accessedJanuary 2015).


20 Ibid.

21 Ibid.

22 Bureau of the Census, Current Population Survey(U.S.Department of Commerce, 2013), table F-8, All Races,available at http://www.census.gov/hhes/www/income/data/historical/families/.


24 Dobson and others, Health Care Spending Slowdown.

25 Michelle Andrews, Employers May Start Paying You toBuy Health In surance, NPR, May 13, 20 14, available athttp://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurance.


27 Sipkoff, Higher Copayments and Deductibles DelayMedical Care, A Common Problem for Americans.

28 American Academy of Pediatrics, Policy Statement:High-Deductible Health Plans,Pediatrics 133 (5) (2014):14611470.

29 Dobson and others, Health Care Spending Slowdown.
http://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdfhttp://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdfhttp://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdfhttp://www.cbsnews.com/news/obamacare-blamed-for-increases-in-insurance-costs/http://www.cbsnews.com/news/obamacare-blamed-for-increases-in-insurance-costs/http://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdfhttp://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdfhttp://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdfhttp://www.huffingtonpost.com/2014/08/13/employer-health-insurance_n_5673039.html?1407938784http://www.huffingtonpost.com/2014/08/13/employer-health-insurance_n_5673039.html?1407938784https://www.businessgrouphealth.org/http://www.managedcaremag.com/archives/1001/1001.downstream.htmlhttp://www.managedcaremag.com/archives/1001/1001.downstream.htmlhttp://www.managedcaremag.com/archives/1001/1001.downstream.htmlhttp://www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costshttp://www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costshttp://www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costshttp://files.kff.org/attachment/2014-employer-health-benefits-survey-full-reporthttp://files.kff.org/attachment/2014-employer-health-benefits-survey-full-reporthttp://files.kff.org/attachment/2014-employer-health-benefits-survey-full-reporthttps://www.healthcare.gov/glossary/https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/http://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdfhttp://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdfhttp://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdfhttp://healthaffairs.org/blog/2012/11/21/implementing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/http://healthaffairs.org/blog/2012/11/21/implementing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/http://healthaffairs.org/blog/2012/11/21/implementing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/http://fahpolicy.org/wp-content/uploads/2014/07/Dobson-DaVanzo-Federation-Cost-Sharing-Report.pdfhttp://fahpolicy.org/wp-content/uploads/2014/07/Dobson-DaVanzo-Federation-Cost-Sharing-Report.pdfhttp://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/http://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/http://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/http://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.htmlhttp://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.htmlhttp://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.htmlhttp://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdfhttp://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdfhttp://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsphttp://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsphttp://www.census.gov/hhes/www/income/data/historical/families/http://www.census.gov/hhes/www/income/data/historical/families/http://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurancehttp://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurancehttp://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurancehttp://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurancehttp://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurancehttp://www.npr.org/blogs/health/2014/05/13/312142207/employers-may-start-paying-you-to-buy-health-insurancehttp://www.census.gov/hhes/www/income/data/historical/families/http://www.census.gov/hhes/www/income/data/historical/families/http://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsphttp://meps.ahrq.gov/mepsweb/survey_comp/Insurance.jsphttp://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdfhttp://www.healthcostinstitute.org/files/IB%209%2010-28-14.pdfhttp://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.htmlhttp://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.htmlhttp://www.nytimes.com/2014/09/12/upshot/do-workplace-wellness-programs-work-usually-not.htmlhttp://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/http://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/http://www.usatoday.com/story/news/nation/2014/08/12/employers-make-you-healthy-wellness-programs/13738369/http://fahpolicy.org/wp-content/uploads/2014/07/Dobson-DaVanzo-Federation-Cost-Sharing-Report.pdfhttp://fahpolicy.org/wp-content/uploads/2014/07/Dobson-DaVanzo-Federation-Cost-Sharing-Report.pdfhttp://healthaffairs.org/blog/2012/11/21/implementing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/http://healthaffairs.org/blog/2012/11/21/implementing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/http://healthaffairs.org/blog/2012/11/21/implementing-health-reform-essential-health-benefits-actuarial-value-and-accreditation/http://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdfhttp://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdfhttp://actuary.org/files/publications/Actuarial_Value_Issue_Brief_072211.pdfhttps://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/https://www.healthcare.gov/glossary/http://files.kff.org/attachment/2014-employer-health-benefits-survey-full-reporthttp://files.kff.org/attachment/2014-employer-health-benefits-survey-full-reporthttp://files.kff.org/attachment/2014-employer-health-benefits-survey-full-reporthttp://www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costshttp://www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costshttp://www.commonwealthfund.org/publications/issue-briefs/2014/nov/out-of-pocket-health-care-costshttp://www.managedcaremag.com/archives/1001/1001.downstream.htmlhttp://www.managedcaremag.com/archives/1001/1001.downstream.htmlhttp://www.managedcaremag.com/archives/1001/1001.downstream.htmlhttps://www.businessgrouphealth.org/http://www.huffingtonpost.com/2014/08/13/employer-health-insurance_n_5673039.html?1407938784http://www.huffingtonpost.com/2014/08/13/employer-health-insurance_n_5673039.html?1407938784http://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdfhttp://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdfhttp://www.urban.org/uploadedpdf/412675-implications-of-the-affordable-care-act-for-american-business.pdfhttp://www.cbsnews.com/news/obamacare-blamed-for-increases-in-insurance-costs/http://www.cbsnews.com/news/obamacare-blamed-for-increases-in-insurance-costs/http://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdfhttp://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdfhttp://www.whitehouse.gov/sites/default/files/docs/full_2014_economic_report_of_the_president.pdf


30/31


30 Agency for Healthcare Research and Quality, MedicalExpenditure Panel Survey: Insurance Component.

31 Kaiser Family Foundation, Employer Health Benefits:2014 Annual Survey.

32 Tara Bernard, High Health Plan Deductibles WeighDown More Employees, The New York Times,September 1, 2014, available at http://www.nytimes.com/2014/09/02/business/increasingly-high-deduct-ible-health-plans-weigh-down-employees.html?emc=eta1&_r=0;National Business Group on

Health, 2015 Large Employers Health Plan DesignChanges Survey Report.

33 Sipkoff, Higher Copayments and Deductibles DelayMedical Care, A Common Problem for Americans.

34 RAND Health, Consumer-Directed Plans and HealthCare Costs, available athttp://www.rand.org/health/feature/CDHP.html (last accessed October 2014).

35 California HealthCare Foundation, High-DeductibleHealth Plan Study: Five Takeaways (2012), available athttp://www.chcf.org/publications/2012/11/hdhp-study.

36 Collins and others, Too High a Price.

37 Richard A. Hirth and others, Out-Of-Pocket SpendingAnd Medication Adherence Among Dialysis Patients In

Twelve Countries, Health Affairs27 (1) (2008): 89102;

Stacie B. Dusetzina and others, Cost Sharing andAdherence to Tyrosine Kinase Inhibitors for PatientsWith Chronic Myeloid Leukemia, Journal of ClinicalOncology32 (4) (2014): 306311.

38 Dobson and others, Health Care Spending Slowdown;Bernard, High Health Plan Deductibles Weigh DownMore Employees.

39 Collins and others, Too High a Price.

40 Ibid.

41 Peter A. Ubel, Amy P. Abernethy, and S. Yousuf Zafar,Full DisclosureOut-of-Pocket Costs as Side Effects,The New England Journal of Medicine369 (16) (2013):14841486.

42 The Center for Consumer Information & InsuranceOversight, Summary of Benefits & Coverage & UniformGlossary, available at http://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-

Uniform-Glossary.html (last accessed October 2014).

43 Federal Register, Rate Increase Disclosure and Review;Final Rule, 45 CFR Part 154, May 2011.

44 Patient Protection and Affordable Care Act, H. Rept. 3590,111 Cong. 2 sess. (Government Printing Office, 2010) .

45 American Academy of Pediatrics, Policy Statement:High-Deductible Health Plans.

46 UnitedHealth Center for Health Reform & Moderniza-tion, Advancing Primary Care Delivery (2014),available at http://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashx.

47 American Academy of Pediatrics, Policy Statement:High-Deductible Health Plans; James M. Naessens and

others, Predicting Persistently High Primary Care Use,Annals of Family Medicine3 (4) (2005): 324330.

48 Health Care Cost Institute, Out-of-Pocket SpendingTrends (2013); personal communication from Frost;Agency for Healthcare Research and Quality, MedicalExpenditure Panel Survey: Insurance Component.

49 Bureau of Labor Statistics, CPI Research Series UsingCurrent Methods (CPI-U-RS), available at http://www.bls.gov/cpi/cpiurs.htm(last accessed January 2015).
http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.rand.org/health/feature/CDHP.htmlhttp://www.rand.org/health/feature/CDHP.htmlhttp://www.chcf.org/publications/2012/11/hdhp-studyhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashxhttp://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashxhttp://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashxhttp://www.bls.gov/cpi/cpiurs.htmhttp://www.bls.gov/cpi/cpiurs.htmhttp://www.bls.gov/cpi/cpiurs.htmhttp://www.bls.gov/cpi/cpiurs.htmhttp://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashxhttp://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashxhttp://www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-Primary-Care-Report-Advancing-Primary-Care-Delivery.ashxhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/Summary-of-Benefits-and-Coverage-and-Uniform-Glossary.htmlhttp://www.chcf.org/publications/2012/11/hdhp-studyhttp://www.rand.org/health/feature/CDHP.htmlhttp://www.rand.org/health/feature/CDHP.htmlhttp://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0http://www.nytimes.com/2014/09/02/business/increasingly-high-deductible-health-plans-weigh-down-employees.html?emc=eta1&_r=0


31/31

The Center for American Progress is a nonpartisan research and educational institute

dedicated to promoting a strong, just, and free America that ensures opportunity

for all. We believe that Americans are bound together by a common commitment to

these values and we aspire to ensure that our national policies reflect these values.

We work to find progressive and pragmatic solutions to significant domestic and

international problems and develop policy proposals that foster a government that

is of the people, by the people, and for the people.

The Great Cost Shift

Documents

Transcript of The Great Cost Shift