By: Peter Freska, MPH, CEBS, Benefits Advisor
The LBL Group
A UBA Partner Firm
We field many calls to review, speak, and comment on a variety of topics. Of course, these generally pertain to health care. In preparing for a coming presentation, I came across a recent article in Becker’s Hospital Review titled “100 Healthcare Statistics to Know”. While there are many topics that comprise health care, the article breaks them down into 10 categories: Hospital and Physician Facts, Hospital and Health System Compensation, Health Coverage, Medicaid, Medicare, Hospital Construction, Accountable Care Organizations, Health IT, Patient Care and Quality, and Miscellaneous Health Care Statistics. While all these topics are important, of particular interest is the section on health coverage:
- Roughly 10.3 million adults in America gained health coverage between January 2012 and June 2014, according to a study published in The New England Journal of Medicine.
- In 2014, the number of uninsured Americans dropped by 3.8 million from January to March, which brought the average percentage of people without health insurance to 13.1%, according to a survey by the Centers for Disease Control and Prevention's National Center for Health Statistics.
- On average, health care cost nearly $9,000 per person in 2012, according to the Bureau of Labor Statistics.
- On average, health care for a typical family of four covered by an employer-sponsored preferred provider organization plan currently costs roughly $23,215. That cost is nearly twice what it was a decade ago, but the year-over-year increase of 5.4% between 2013 and 2014 is the lowest growth rate recorded by the Milliman Medical Index since it was first calculated in 2002.
- National health care spending is projected by the Centers for Medicare & Medicaid Services to increase 4.7% from 2013 to 2015.
In reviewing these statistics against the United Benefit Advisors (UBA) 2014 Health Plan Survey* (which is the nation’s largest and most comprehensive benchmarking survey of plan design and cost), I came up with some interesting comparisons. First, it is important to note that the UBA 2014 Health Plan Survey database contains the validated responses of 16,467 health plans, sponsored by 9,950 employers, who cumulatively employ nearly one million employees and provide coverage for more than four million total lives. Individually validated responses from employers in more than 3,000 communities in all 50 states and the District of Columbia complete the database.
- To compare a few statistics, the outlined health care cost was “nearly $9,000 per person in 2012.” The 2014 UBA Health Plan Survey indicates an average plan cost of $9,504 with an average employee cost of $3,228 and an average employer cost per employee of $6,276.
- Premium increases are now an average of 5.6% for all plans - up from 5.5% in 2013.
Related to the premium increases are plans that have been able to hold out on making changes – “grandfathered,” and now so called “grandmothered” plans.
- Employers delaying their health plan renewal dates until December 1 increased 322% from 2013 to 2014. Approximately 32% of employers postponed their renewal date, 94% of which were small businesses in the fewer than 100 employee market. In the fewer than 50 employee group size, there was more than five times the number of renewals for December 1, 2013, over 2012.
Driving large employers (1,000+ employees), is their ability to more easily self-fund.
- 10.6% of all plans are self-funded, with more than three-fourths (80.0%) of all large employer plans self-funded.
- These measures continue to indicate that self-funding is moving down market, as smaller employers are working to avoid premium increase and the Health Insurer Transitional Tax (HIT Tax). A move to self-funding from a fully insured plan will allow an organization to recognize a 2% to 7% (nationally) HIT tax.
Knowing the numbers, and having the ability to benchmark employer plans, is paramount - especially with so many changes driven by health care reform. Current, validated data allows employer plans to make the best informed decisions to benefit the organization as well as the employees and families to which they provide benefits.
* Data in the 2014 UBA Health Plan Survey is based on responses from 9,950 employers sponsoring 16,967 health plans nationwide. The survey's focus is intended to provide a current snapshot of the nation's employers rather than covered employees. Results are applicable to the small to midsize market that makes up a majority of American businesses, as well as to larger employers, providing benchmarking data on a more detailed level than any other survey.
“In the rapidly changing implementation of PPACA, it is critical for businesses to know their benchmark on medical plans,” says UBA CEO Les McPhearson. “This is not only for their industry, but in their state, region and nationally as well. I'd encourage employers to look at the UBA Health Plan Survey in a way that is most relevant to their business.”
The 2014 UBA Health Plan Survey offers more than national data and UBA recommends that employers benchmark with local data, which is more effective when adjusting plan design, negotiating rates, and communicating value to employees.