The Pressures Of Rising Costs On Employer Provided Health Care

The pressures of rising costs on employer provided health care: hearing before the Subcommittee on Health, Employment, Labor and Pensions, Committee on Education and the Workforce, U.S. House of Representatives, One Hundred Twelfth Congress, first session, hearing held in Washington, DC, March 10, 2011.

The pressures of rising costs on employer provided health care: hearing before the Subcommittee on Health, Employment, Labor and Pensions, Committee on Education and the Workforce, U.S. House of Representatives, One Hundred Twelfth Congress, first session, hearing held in Washington, DC, March 10, 2011.

Thomas P. Miller speaks before the Subcommittee on Health, Employment, Labor and Pensions about the pressures of rising costs on employer-provided health care.

The United States is unique among economically advanced nations in its reliance on employers to provide health benefits voluntarily for workers and their families. Although it is well known that this system fails to reach millions of these individuals as well as others who have no connection to the work place, the system has other weaknesses. It also has many advantages. Because most proposals for health care reform assume some continued role for employers, this book makes an important contribution by describing the strength and limitations of the current system of employment-based health benefits. It provides the data and analysis needed to understand the historical, social, and economic dynamics that have shaped present-day arrangements and outlines what might be done to overcome some of the access, value, and equity problems associated with current employer, insurer, and government policies and practices. Health insurance terminology is often perplexing, and this volume defines essential concepts clearly and carefully. Using an array of primary sources, it provides a store of information on who is covered for what services at what costs, on how programs vary by employer size and industry, and on what governments doâ€"and do not doâ€"to oversee employment-based health programs. A case study adapted from real organizations' experiences illustrates some of the practical challenges in designing, managing, and revising benefit programs. The sometimes unintended and unwanted consequences of employer practices for workers and health care providers are explored. Understanding the concepts of risk, biased risk selection, and risk segmentation is fundamental to sound health care reform. This volume thoroughly examines these key concepts and how they complicate efforts to achieve efficiency and equity in health coverage and health care. With health care reform at the forefront of public attention, this volume will be important to policymakers and regulators, employee benefit managers and other executives, trade associations, and decisionmakers in the health insurance industry, as well as analysts, researchers, and students of health policy.

Health insurance for a high-paid employee costs an employer the same amount as health insurance for a low-paid employee. At the same time, healthcare costs, and therefore health insurance premiums, are growing much more rapidly than earnings. Therefore, it is reasonable to expect thatőwhile earnings will indeed become more unequal over timeőtotal compensation will not become more unequal, or, when considered over the entire labor force, at least will not become as unequal. Direct empirical evidence supports this hypothesis, based on unique, unpublished survey data about employersņ compensation costs collected by the Bureau of Labor Statistics. The supporting results hold both for the period 1996� and for the period 1992�. A regression estimated over the period 1990� also bolsters the understanding that the rising cost of health care is a major cause of increasing earnings inequality. This finding suggests that the best policy to reduce inequality would be to effectively control the rate of growth in the cost of health care.

Examines the effects of rising health care costs on the economy. In particular, it examines how the costs affect workers, businesses and governments. Chapters: special characteristics of health care markets; what has caused the rapid increase in health expenditures; the economic effects of rising costs for employer-provided insurance and how the rising costs for government health programs affect the economy. 21 charts and tables.