Most individuals in the United States receive health insurance through employer benefits, as the workplace is often the most convenient way that consumers can obtain coverage and have it be affordable at the same time. However, the cost of coverage got a bit more expensive for employers and policyholders in 2015, as newly released data reveals that premiums rose in 2015.
Among mid- to large-size companies, health insurance rates rose more than 3 percent last year, based on the most recent estimates revealed by an Illinois-based benefits firm. While premiums have increased fairly consistently for many years now, the degree to which prices have grown has slowed. In fact, the 3.2 percent uptick was the slowest rate of growth in 20 years.
Mike Morrow, an employee benefits expert, referenced how the economy's somewhat tepid pace over the past year played a contributing role.
"The sluggish growth in the economy has deterred many individuals from using medical services, and there's also been modest price inflation – both factors have been primary drivers for the low rates of premium increases over the past few years," Morrow explained. "As prescription drug costs continue to grow at a double-digit pace and the economy picks up speed, it's likely these premium rates will start to climb."
He added that early indications suggest premium levels will appreciate by roughly 4 percent in 2016.
134 percent increase in employee contributions since 2005
Employer-based insurance has long been the primary way consumers pay for medical expenses, the cost of which is usually split between the business that offers it and the individual who owns it. Between January and December 2015, employees bore the brunt of medical coverage costs. In the past decade, employee contributions have increased by more than 134 percent, based on the Lincolnshire, Illinois-based firm's calculations. In terms of raw data, employees spent nearly $2,500 of their earnings toward premiums and another $2,200 in out-of-pocket expenses, including deductibles, and copayments last year. By comparison, in 2005, employees spent only $2,000 combined on health care expenses and out-of-pocket costs.
Meanwhile, business owners are increasing their efforts to ease employees' financial strain. The data found that both medium and large companies are implementing a so-called "managed trend" means of reducing consumer health costs in the short term, and non-traditional strategies in the long-term, such as performance-based and value-based.
3 in 4 say premiums rose in past year
When the Affordable Care Act was introduced in 2009 – and signed into law in 2010 – supporters of the legislation said that it would help to lower premiums for families. Some indicated that the savings would be in the thousands of dollars per year. That hasn't been the case for most people, however, whether their coverage stems from employers or exchanges operated by the federal or state governments. Almost three-quarters of Americans – 74 percent – says they're paying more for insurance now than they were 12 months ago, according to a recent poll conducted by Gallup. That's up from 67 percent who indicated as much last year. In 2013, 69 percent said health premiums got more expensive.
