Source: United Benefit Advisors, 2013
From the press release:
United Benefit Advisor’s 2013 Health Plan Survey, the nation’s largest independent health plan benchmarking survey, reveals that while private sector employees are absorbing more costs for their own health care, facing high deductibles and huge out-of-pocket cost increases in recent years, they are also bearing more as taxpayers by assuming a higher percentage of costs for employees who work in the public sector.
The survey finds that public employer cost per employee increased 22 percent from $7,001 in 2012 to $8,551 in 2013, while employer cost in the private sector increased only 15.8 percent from $5,226 in 2012 to $6,040 in 2013. The portion an employee pays decreased for both during that same time period, but by nearly 30 percent (or $1,025) for a public worker and only 15.7 percent for a private worker. Taxpayers, therefore, assumed an additional $1,681 or 24.28 percent of a public employee’s health care cost.
Findings from the comprehensive survey of more than 11,000 employers show that the private sector has controlled costs better than public employers by using plan designs that shift more up-front cost to a strategy proven to decrease total cost. Such plans, known as consumer-driven health plans (CDHPs), grew from 22.5 to 24.1 percent of all plan types offered across all industries and size groups. A majority of public plans, however, are still considered “Cadillac plans,” rich in costly benefits that have been stripped from most private plans — putting the public sector at risk of facing the forthcoming “Cadillac Tax.”…
…Health Plan Design Differences in Public versus Private Sector:
– Private employees with dependents have been hit hardest, where the average annual premium (employee contribution) has increased by 1.5 percent since 2012 and 19.7 percent since 2009. A public worker, however, actually saw their annual contribution for dependents decrease by 3.05 percent from $4,716 in 2012 to $4,572 in 2013.
– Total Cost of Employer-Sponsored Health Plans has increased at a rate of 21 percent, on average, for both public and private industry for the past five years; however, the private sector has better controlled costs in recent years. Annual Total Cost for the public sector increased from $10,356 in 2012 to $10,914 in 2013, a 5.4 percent increase. In the private sector, however, Annual Total Cost increased only 2.8 percent in the same time period, from $9,032 to $9,282 in 2013.
– Out of Pocket Maximums (OOP) are much higher in the private sector, with the average worker facing an in-network OOP maximum of $3,721 for a single adult and $8,258 for a family, versus a public sector worker who faces an in-network OOP maximum of only $2,262 for a single adult and $6,032 for dependents. The differences in out-of-network OOP maximums is even more extreme, with a private worker facing a family maximum nearly $5,000 higher than that of a public worker.
– Deductibles are another area where private employees face higher up front costs. The average in-network deductible for a public employee in 2013 was $1,356 for a single adult and $3,064 for a family; a private employee will pay $1,891 for a single adult and $4,323 for a family, a nearly 40 percent difference for each.
– Average in-network co-insurance dropped from 90 percent to 82.5 percent for private employees (a significant decrease), but remained at 90 percent for the public sector….