Employer healthcare costs rise while employees decrease

Rising deductibles threaten employer-sponsored health plans burdening struggling families. 

Before the Coronavirus struck the country and the world, approximately half the population of the United States sourced healthcare through their employers. That accounts for about 160 million people that relied on healthcare coverage through their job. Those employers often source their health plans through the low cost, but limited marketplace of the Affordable Care Act due to their mandate to provide low-cost healthcare to their staff. (statistics provided by healthpayerintelligence.com) 

As we all know, the Coronavirus affects every corner of our lives in 2020. The economic impact of the pandemic is directly correlated with large swaths of layoffs throughout the country, resulting in 14.6 million Americans losing their healthcare. As the pandemic continues, we can expect this trend to continue. 

Clearly, not having health insurance during a pandemic is not ideal, scary for the individual and potentially very costly for the healthcare system as a whole. For these individuals  previously receiving healthcare through their employers, the ACA is the best option, although it has limited plans and complex eligibility rules. 

In conjunction with an expansion of the ACA, people are calling for an expansion of Medicaid to relieve the highest cost burden to the unemployed. 

With less staff, healthcare costs and the overall cost of the healthcare system during the pandemic has increased. Employers facing higher rates have less employees paying costs, deductibles, etc. as they have to make tough decisions on cost cutting measures. Health plan costs for middle income people have risen continuously over the past ten years. (Medical Expenditure Panel Survey Insurance Component)

“As far as COVID-19’s effects on premium contributions and deductibles, the future is uncertain as they depend on trends in healthcare costs, according to the brief. The past year has seen spikes in healthcare spending due to COVID-19 hospitalizations as well as sharp declines in spending from drops in nonurgent care. Overall, the net effect appears to be lower spending and higher profits for insurance companies.” healthpayerintelligence.com 

The healthcare system has a chance to combat future trends by expanding affordable healthcare to more people. Expansion of the ACA is where people focus this hope, given it’s existing promise for affordable healthcare for those who need it most. Now that more people are in need of healthcare, the ACA expansion could offer less restrictions for qualifications and more pan options for different demographics. Employers will continue to hold on and renew benefit offerings for 2021, but if these costs continue, benefits could be jeopardized by rising costs.