Corporate health costs: no crisis to match the rhetoric


Listening to the rhetoric on the street, it sounds like employers have reached their limit and are ready to take drastic action to get control of rising healthcare costs. But Drew Altman presents a puzzle in a column for Axios: the data do not seem to justify the rhetoric. See this graph below:


Health costs as a percentage of overall compensation has remained between 7 and 8 for all private employers over the past 10 years.

The real pain, not captured in these data, is that employers have kept these costs stable by pushing the burden to employees by increasing cost sharing such as rising deductibles. Premium growth is at 3-4% per year. And costs as a percentage of compensation is significantly higher that it was 20 years ago.

But overall this paints a picture of modest change.

Our conclusion: don’t expect significant action from employers. They will continue to use a “grab bag” of techniques and tweaks to deal with healthcare, with no fundamental change.



Read: Axios: Corporate health costs don't look like a crisis

Read: KFF: 2018 Employer Health Benefits Survey


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