How’s the job-based insurance marketplace doing? Better than Obamacare, a new study finds

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When health care is talked about on the national stage, it’s largely been centered on the Affordable Care Act (ACA) individual and small group marketplace, which roughly affects 7 percent of United States residents. But what is the state of insurance for people who have employer-based health insurance?

Annual premiums for more than 150 million U.S. residents who get health insurance through their jobs increased 3 percent, on average. Kaiser Family Foundation (KFF) and the Health Research & Educational Trust are reporting moderate premium increases; this is juxtaposed against the ongoing narrative that premiums elsewhere are skyrocketing. ACA enrollees will likely see big premiums increases for 2018 plans, but most will be safeguarded by federal subsidies.

“Most people think they are affected by premium increases in the [ACA] marketplace,” KFF’s President and Chief Executive Officer Drew Altman said in a conference call with reporters. This is not the case.

The employer-based marketplace is stable compared to the ACA’s. In 2017, the average annual premiums for employer-sponsored health insurance are $6,690 for single coverage and $18,764 for family coverage according to the report released Tuesday. Employer premiums for family coverage have increased 19 percent since 2012, lower than previous five-year spans. That is higher than the 6 percent inflation rate and 12 percent of wage-growth rate increases across a similar time period. In stark contrast, the ACA marketplace saw a 20 percent increase in premiums just last year alone.

Other highlights from the study include:

  • Workers are picking up a larger portion of the insurance tab. Workers on average now contribute $5,714 annually toward their family premiums, and those at small firms contribute more – $6,814 on average. Workers contribution to family premiums increased more rapidly compared to employer’s share since 2012 ( 32 percent versus 14 percent).
  • The average annual deductible — bills workers pay before insurance kicks in — for families this year is $1,505, a minimal increase from last year ($1,478). For individuals, deductibles remains stagnant at $1,221.
  • Employees covered by small firms generally pay more to cover their families. On average, small firm employees — that hire 200 people or less — contribute $1,550 more annually for family health coverage than those at large firms.

Why insurance costs have continued their slow pace is “health care’s greatest mystery,” said Altman. Anyone who has a definitive answer as to why this is the case likely has an incentive to, he continued.

Most people buy private insurance through their jobs. This wasn’t always the case. According to the Incidental Economist blog, tethering health insurance to one’s job was not preordained but a result of World War II wage freezes and tax policy thereafter. To attract workers, businesses offered benefits, namely health insurance.

There have been calls to change to the status quo. Senator Bernie Sanders (D-VT) released legislation last week that would scrap the current employer-based health care model and implement a Medicare-for-all national health insurance program. Sanders plan is, for now, just a vision of universal health care. As Republicans rush to repeal the last major health care legislation, employer-based marketplace insurance is the law of the land. Thankfully, it’s doing alright.

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