U.S. employers’ health benefit cost continues to rise at twice inflation rate, Mercer survey finds

Source: Mercer

Total U.S. health benefit cost rose by 6.1 percent in 2007, the same pace as last year, to an average of US$7,983 per employee, according to the National Survey of Employer-Sponsored Health Plans, conducted annually by Mercer and released today.

The good news is that cost increases have held steady for three years (after spiking to nearly 15 percent in 2002) and are likely to slow a bit further in 2008. The bad news is that’s still more than twice the rate of inflation. Health cost growth is outpacing wages and material costs and eroding business profitability.

There are consequences for working Americans as well: In the absence of a mandate to provide coverage, some small employers are simply dropping their plans, adding their employees to the growing rolls of the uninsured. Among employers with fewer than 200 employees, health coverage prevalence fell from 63 percent to 61 percent in 2007 – and that’s down from 66 percent five years ago. This drop-off is continuing despite the new availability of relatively low-cost consumer-directed health plans (CDHPs), which may be a concern for state and federal policymakers currently debating the future of US health insurance.

Survey highlights include extensive data, graphs, charts. Full report available for purchase.

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