One week after OPM announced a 1.8% increase in Federal Employees Health Benefit plan premiums for 2007, the Kaiser Family Foundation and the Health Educational and Reseach Trust released their 2006 Employer Health Benefits Survey, the key findings of which are feaured in a publically available Health Affairs report. The Survey reports that “premiums for employer-sponsored health coverage rose an average 7.7 percent in 2006, less than the 9.2 percent increase recorded in 2005 and the recent peak of 13.9 percent in 2003” The KFF press release and other press accounts note that the 2006 increase, while low compared to other recent years, is more than double the rate of inflation. FEHBP premiums rose 6.6% for 2006, which suggests that the 2007 survey will report significantly lower premium increases.
Other survey findings include the following:
- An estimated 4 percent of covered workers are enrolled in high-deductible plans with a savings option, compared with 60 percent in preferred provider organizations (PPOs), 20 percent in health maintenance organizations, 13 percent in point-of-service plans, and 3 percent in conventional indemnity plans. Among the 2.7 million workers estimated to be enrolled in HSAs or HRAs this year, 1.4 million are in HSA-qualified plans (up from 0.8 million estimated last year) and 1.3 million are in plans with HRAs (statistically unchanged from last year’s 1.6 million estimate).
- About 61 percent of firms nationally offer health benefits to at least some of their workers, statistically unchanged from last year’s offer rate (60 percent). While nearly all large businesses (with at least 200 workers) offer health benefits to their workers, fewer than half of the smallest firms (with three to nine workers) do.
- On average, workers are paying $259 more this year than they did last year toward the cost of family health coverage.Workers at small firms (with three to 199 employees) on average contribute significantly more to their premiums ($3,550 for family coverage) than workers at larger companies ($2,658 for family coverage). On average, workers this year are paying about 16 percent of premiums for single coverage and 27 percent of premiums for family coverage, with their employers paying the rest. That share is essentially unchanged in recent years.
- In 2006, the average in-network PPO deductible for workers facing a deductible reached $473 for single coverage. Average co-payments for drugs across plan types were $11 for generic drugs, $24 for preferred drugs and $38 for non-preferred drugs.
- Few employers have a lot of confidence in strategies to contain rising health-care costs. For example, only 17 percent of small employers and 28 percent of large employers say that they consider disease management programs “very effective” at controlling health-care costs. Employers were less likely to rate other strategies as very effective, including consumer-directed health plans (16 percent of small and 13 percent of large employers), higher employee cost sharing (15 percent of small and 13 percent of large firms), and tighter managed-care networks (9 percent of small and 4 percent of large firms).
The last finding is worth further investigation.