Workers, employers adapt to changing health care environment

Oct. 28--With many Connecticut businesses eyeing in a week's time the start of open enrollment for health insurance, the Trump administration has proposed an expansion of health reimbursement arrangements that would allow employers to pay their workers for health insurance that they purchase on their own dime, with those company funds paid out on a tax-preferred basis.

It is one of multiple ideas Trump has put out in the past month to address health care costs and access -- derided by some critics as a piecemeal approach in comparison to the top-down ideals of the Obama-era Affordable Care Act -- with others including reducing incentives for doctors to "freeload" prescription drugs onto Medicare patients.

In announcing the health reimbursement arrangement expansion, the U.S. Department of Labor noted that just 30 percent of businesses with less than 25 employees offer health insurance, down from 44 percent of businesses eight years previously.

Under the Trump plan, even companies that offer insurance could provide up to $1,800 annually to cover qualifying medical expenses, including dental benefits and short-term health plans the president proposed last year as a cheaper, stop-gap option allowing people to get coverage for up to four years.

The U.S. Department of Treasury estimates that 10 million people could take advantage of the HRA program, whether through state-based exchanges like Access Health CT that is on the cusp of its own open enrollment period, or through the private marketplace.

Six in 10 on employer-based insurance

In a comprehensive annual survey of employer-sponsored health insurance published earlier in October, the Kaiser Family Foundation calculated at 5 percent the average increase in family health insurance coverage this year, to an average of $19,600. That amount does not include an annual deductible of $1,575 that employees must pay prior to being able to make a claim, in addition to the $5,550 subtracted from their paychecks to cover their share of the total insurance premium.

The study did not break down insurance costs by state. In a separate analysis in 2017, the Kaiser Family Foundation included Connecticut among 14 states where employees shouldered at least 24 percent of their health insurance premiums. The average Connecticut employee picked up $1,670 on a $7,000 individual insurance policy, lower than the $1,750 paid on average in Massachusetts -- highest in the nation -- but above the average rates in New York and New Jersey.

For the entire United States, employees in Hawaii have the best deal for health care, picking up just 11 percent of the cost of insurance, with Maine workers absorbing the lowest cost of insurance premiums in the Northeast at 21 percent of the total bill, or just over $1,300.

In Connecticut last year, 60 percent of residents get health insurance through their employers, according to the U.S. Census Bureau, with 13 percent purchasing coverage themselves. The federal and state government furnished insurance through Medicare and Medicaid for 39 percent of residents, with the remaining 5.5 percent going without.

Those numbers swelled by 22,000 people, the Census Bureau determined, a year in advance of the Trump administration eliminating a tax penalty for those lacking insurance that had been enacted under the federal Affordable Care Act.

And costs incurred by Connecticut hospitals remained steady over a 12-month span through June 2017, according to the Connecticut Health Care Cabinet, amounting to 2 percent of total hospital expenses.

"I'm interested in the uncompensated care costs -- a little disappointed, frankly," said Ellen Andrews, a Health Care Cabinet board member who is executive director of the New Haven-based Connecticut Health Policy Project, speaking at a mid-October meeting of the cabinet. "It didn't go down by much ... (and) I'd like to know what's underneath that -- increasing deductibles? More people who are under-insured?"

Employee feedback, employer adjustments

For employers offering health insurance, confidence in those plans is near the highest level in 15 years, according to results of a national survey by Willis Towers Watson released earlier in October, with 69 percent of employers stating they intend to offer plans within 10 years, up from 64 percent in the prior survey.

Even as companies increasingly adopt plans that award incentives or levy penalties on employees based on regular checkups, healthier lifestyles or other parameters -- about four in five are doing so today for the set of employers participating in the survey -- Willis Towers Watson found that companies are making adjustments based on feedback from workers on any requirements they are finding onerous.

More than 40 percent of employers believe those programs have worked in lifting the health of their workforces, Willis Towers Watson found.

"Over the next three years, companies will emphasize targeting specific clinical conditions and enhancing the employee experience," Willis Towers Watson stated in its report. "Employee engagement in health and well-being initiatives is a persistent challenge ... but employer commitment to well-being has never been stronger."

[email protected]; 203-842-2545; @casoulman

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