Kaiser Family Foundation Survey Finds Health Care Costs Squeezing Employees and Employers

September 27, 2019

Despite employer efforts to reduce health care costs, the 2019 Kaiser survey of employer health benefits found the average cost of family coverage increased by 4.4% from 2018 to 2019, as the Affordable Care Act’s Cadillac tax is already negatively impacting employee benefits.

The survey details a number of steps employers are taking to reduce costs.  While most media headlines focused on the cost of family coverage rising to $20,576, the report found:

  • 84% of large firms have a wellness program;
  • 82% of large firms cover telemedicine;
  • 77% of large firms cover care at retail clinics; and
  • 19% of large firms have an on-site or near-site health clinic.

Price increases are driving up costs:  According to Cynthia Cox, vice president at the Kaiser Family Foundation, “if you look at what’s driving health-care costs year to year, it’s the price of health care: the cost of a doctor’s visit, the cost of a hospital stay.  That’s really what’s making those premiums and deductibles go up each year.”

The ACA's Cadillac tax is having a negative impact on employer health benefits.  A recent Kaiser Family Foundation analysis finds 21% of employers would be affected by the tax if it takes effect in 2022, and the 2019 survey found 33% of firms say the tax had an important impact on their health benefit decisions for the 2019 plan year.

Takeaway:  The survey results are likely to be used by advocates for Medicare for All and a public option to raise questions about the ability of employers to quell rising health care costs in the U.S.  Proponents of employer-based coverage will need to continue highlighting the innovative steps they take to reduce costs for employees, retirees, and their dependents.