NCPA - National Center for Policy Analysis

Employees Paying More for Health Care

December 10, 2001

Employers nationwide are requiring workers to pay a larger share of their medical costs, according to a new survey by the William M. Mercer consulting firm. Some health economists say the added costs will make consumers more cautious about their medical spending. But the cost shift has had little discernible effect yet on surging health care inflation.

  • According to the survey, 40 percent of large employers say they will require workers to pay a higher proportion of the total cost in 2002.
  • Cost increases averaged 11.2 percent, to $4,924 for each employee in 2001 -- with a 12.7 percent increase expected in 2002.
  • For large employers -- those with 500 or more workers -- costs rose 12.1 percent this year, to $5,162.
  • Most employers are dealing with cost increases by raising deductibles.

At least half the nation's small employers in health plans with preferred provider networks had deductibles of $500 or higher this year -- double the $250 median in 2000.

Some 17 percent of all employers in the survey said it was "somewhat or very likely" that within the next two years they would introduce a new type of health plan that could shift more of the costs to people who have several thousand dollars worth of medical costs. Healthy workers would receive a bonus credit for future medical spending.

Source: Milt Freudenheim, "Employees Are Shouldering More of Health Care Tab," New York Times, December 10, 2001.  


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