Hidden costs of health care
In Give and take, I noted that the cost of non-wage benefits can be a brake on business hiring and depress wages, and that in recent years the cost of total compensation for U.S. workers has risen as a share of national income but wages have declined, as employers trim wage outlays to cover rising non-wage costs.
No non-wage benefit costs more than health insurance. The misperception persists – mainly because so many on the social right keep saying it – that private health insurance is cheaper than “government” insurance such as Medicare. It only seems cheaper because so many Americans directly pay only a fraction of the costs.
According to a new report from Milliman, which describes itself as among the world's largest providers of actuarial services, it costs an average of $23,215 to cover a family of four under employer-sponsored preferred provider health insurance plans. Write Sarah Kliff,
This includes what the family pays for their monthly premium, what the employer contributes and any out-of-pocket costs incurred over the course of the year. That's more than double the cost a decade ago when, in 2004, coverage cost $11,192. Employers cover just over half the costs, paying for 56 percent of the average premium in 2014. Workers contributed $5,908, on average, in premium s and another $3,787 on out-of-pocket costs when they turned up at the doctor.
Kliff adds that while overall cost growth is slowing, companies are not passing those savings on to employees, but are asking employees to pay a bigger chunk than ever of their insurance bills.