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2011 Health Care Cost and Utilization Report
2011 Health Care Cost and Utilization Report
Source: Health Care Cost Institute
The Health Care Cost and Utilization Report: 2011 provides the first broad look at 2011 health care spending among those with employer-sponsored insurance (ESI). HCCI found that average dollars spent on health care services for that population climbed 4.6 percent in 2011, reaching $4,547 per person. This was well above the 3.8 percent growth rate observed in 2010.
Key Findings from this Report
- Regional spending gap widening
- Spending on children’s health care rising fastest
- Cost sharing between patients and payers remains stable
- Use of health care services up, particularly outpatient care
- Rising prices were the primary driver of spending growth
- Prescription spending slowed, growing just 1% from 2010 to 2011
2012 Health Confidence Survey: Americans Remain Confident About Health Care, Concerned About Costs, Following Supreme Court Decision
2012 Health Confidence Survey: Americans Remain Confident About Health Care, Concerned About Costs, Following Supreme Court Decision
Source: Employee Benefit Research Institute
Executive Summary
- Confidence about various aspects of today’s health care system has remained fairly level before and after the passage of the Patient Protection and Affordable Care Act (PPACA), and has not apparently been impacted by the June 2012 Supreme Court decision.
- Asked to rate the health care system, Americans offer a diverse perspective: 28 percent consider it to be “good,” 28 percent say “fair,” and 26 percent rate it “poor,” while 12 percent rate it very good and 5 percent say it is “excellent.” However, the 2012 Health Confidence Survey finds that the percentage of
- Americans rating the health care system as poor doubled between 1998 and 2004 (rising from 15 percent to 30 percent).
- In contrast with the ratings for the health care system overall, Americans’ rating of their own health plans continues to be generally favorable—more than half of those with health insurance are extremely or very satisfied with their current plans, and a third are somewhat satisfied.
- Dissatisfaction with the health care system appears to be focused primarily on cost.
- Among those experiencing cost increases in their plans in the past year, 31 percent state they have decreased their contributions to retirement plans, and more than half have decreased their contributions to other savings as a result.
Who has benefits in private industry in 2012?
Who has benefits in private industry in 2012?
Source: Bureau of Labor Statistics
Health, retirement, and paid leave benefits made up more than three-fifths of private industry employer-provided benefit costs in June 2012.1 Although employers in most states are not required to offer these benefits, they often make some form of each major benefit type available to their employees, especially to full-time and high-wage workers. For example, paid holidays are offered to 77 percent of private industry workers overall and about 90 percent of full-time and high-wage workers. Medical care and retirement benefit availability show similar patterns.
This issue of Beyond the Numbers provides an overview of benefits for private industry workers, focusing on access to and participation in retirement, medical care, and paid leave benefits by various worker and establishment characteristics. The estimates of private industry benefit access, participation, and share of medical care premiums in this issue are from the “National Compensation Survey: Employee Benefits in the United States—March 2012,” available online at http://www.bls.gov/ncs/ebs/sp/ebnr0018.pdf.
A glossary of terms used in this issue is at the end of the article.
Meeting the Challenge: Maximizing the value of employer-sponsored health care
Meeting the Challenge: Maximizing the value of employer-sponsored health care
Source: Deloitte
Employer-sponsored health care (ESHC) is the dominant source of health care coverage for the civilian workforce in the United States. According to the 2010 Census, 103 million workers obtained ESHC coverage that benefited 169 million individuals. Sixty-eight percent of the civilian workforce was insured through ESHC plans in 2010; this share increased to 73 percent when only full-time, year-round employees were considered.
ESHC benefits employees, employers, and health care plans by improving access to health insurance, providing more cost-effective coverage, strengthening the employer-employee relationship, contributing to productivity, supporting recruitment and retention, and improving efficiency of coverage. Yet, ESHC plans are under pressure from rising health care costs, a stalled economic recovery, and regulatory uncertainty around health care reform and possible tax reform.
Census Bureau Releases 2011 American Community Survey Estimates
Census Bureau Releases 2011 American Community Survey Estimates
Source: U.S. Census Bureau
The U.S. Census Bureau today released findings from the 2011 American Community Survey. The survey provides a wide range of important statistics about our nation’s people, housing and economy for all communities in the country. The results are used by everyone from retailers, homebuilders and police departments, to town and city planners. The survey is the only source of local estimates for most of the 40 topics it covers, such as educational attainment, occupation, language spoken at home, nativity, ancestry and selected monthly homeowner costs down to the smallest communities.
On Sept. 12, the Census Bureau released national statistics on 2011 income, poverty and health insurance coverage from the Current Population Survey. The American Community Survey includes 2011 statistics for states, cities and smaller areas.
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The estimates released today are available in detailed tables for the nation, all 50 states, the District of Columbia, Puerto Rico, every congressional district, every metropolitan area, and all counties and places with populations of 65,000 or more. See the Census Bureau’s American FactFinder database to find statistics for your area.Also released today were three short reports supplementing detailed tables with additional analysis on three key topics: income, poverty and health insurance.
Income, Poverty and Health Insurance Coverage in the United States: 2011
Income, Poverty and Health Insurance Coverage in the United States: 2011
Source: U.S. Census Bureau
The U.S. Census Bureau announced today that in 2011, median household income declined, the poverty rate was not statistically different from the previous year and the percentage of people without health insurance coverage decreased.
Real median household income in the United States in 2011 was $50,054, a 1.5 percent decline from the 2010 median and the second consecutive annual drop.
The nation’s official poverty rate in 2011 was 15.0 percent, with 46.2 million people in poverty. After three consecutive years of increases, neither the poverty rate nor the number of people in poverty were statistically different from the 2010 estimates.
The number of people without health insurance coverage declined from 50.0 million in 2010 to 48.6 million in 2011, as did the percentage without coverage – from 16.3 percent in 2010 to 15.7 percent in 2011.
Plan Participation in Health Insurance Exchanges: Implications for Competition and Choice
Plan Participation in Health Insurance Exchanges: Implications for Competition and Choice
Source: Urban Institute
This brief examines the conditions under which competition in health insurance exchanges is likely to be effective in placing downward pressure on insurance premiums. We conclude that areas with a single dominant insurer or a dominant hospital system are less likely to experience effective competition. In markets in which there are several insurers with significant market share and no dominant hospital system, the result could be limited or tiered network products that could successfully constrain the cost of premiums. Participation of existing Medicaid plans may also increase effective competition in health insurance exchanges.
CRS — NFIB v. Sebelius: Constitutionality of the Individual Mandate
NFIB v. Sebelius: Constitutionality of the Individual Mandate (PDF)
Source: Congressional Research Service (via Federation of American Scientists)
In one of the most highly anticipated decisions in recent years, the Supreme Court released its ruling regarding the constitutionality of the Affordable Care Act (ACA) in June 2012. In NFIB v. Sebelius, the Court largely affirmed the constitutionality of ACA, including its individual mandate provision. In a move that was unexpected to many, the Court upheld the mandate as a valid exercise of Congress’s taxing power, but not its Commerce Clause power.
First, Chief Justice Roberts, in a controlling opinion, found that the Commerce Clause does not provide Congress with the authority to enact the individual mandate. While the Chief Justice acknowledged that Congress’s authority to regulate interstate commerce is quite broad, he also pointed out that Congress had never attempted to use this power to make individuals buy an undesired product. The Chief Justice further noted that the language of the Clause (i.e., the power to regulate interstate commerce) reflects the idea that there must be something to regulate in the first place (i.e., some type of “activity”). The problem with the individual mandate, as indicated by the Chief Justice, is that it “does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product on the ground that their failure to do so affects interstate commerce.” The Chief Justice also noted that if the mandate were permissible under the Commerce Clause, a mandatory purchase could be permitted to solve almost any problem, thus agreeing with those who had raised concerns about a lack of a limiting principle—the idea that if Congress could require the purchase of health insurance, it could require Americans to purchase anything. While no other Justice joined the opinion of Chief Justice Roberts with respect to the Commerce Clause analysis, four Justices issued a dissenting opinion that reached the same conclusion based on somewhat similar reasoning.
The Chief Justice then found the mandate provision to be a valid exercise of Congress’s taxing power. For this portion of the opinion, Chief Justice Roberts was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. The key question here was whether the mandate provision was a tax or penalty. The Court used a functional approach to find the provision was in fact a tax, looking at its substance and application, rather than any statutory labels (which used the term “penalty”). The Court rejected the argument that the provision was actually a regulatory penalty, and therefore outside the scope of the taxing power, because it was not prohibitory, had no scienter requirement, and would be collected just like any other tax by the IRS. The provision’s obvious regulatory purpose was not a significant factor, with the Court noting that it is common for taxes to be intended to influence behavior. Further, the Court found the provision did not have to be read as making the failure to buy health insurance unlawful. Finally, the Court found the mandate provision, while a tax, was not a “direct tax” and therefore was not subject to the Constitution’s requirement that direct taxes be apportioned among the states based on population.
It should be noted that the Supreme Court also rendered a decision on the constitutionality of the ACA’s expansion of the Medicaid program. For a discussion of the Supreme Court’s decision on the Medicaid expansion, see CRS Report R42367, Medicaid and Federal Grant Conditions After NFIB v. Sebelius: Constitutional Issues and Analysis, by Kenneth R. Thomas.
State Health Plans in Fiscal Austerity: The Challenge of Improving Benefits While Moderating Costs
State Health Plans in Fiscal Austerity: The Challenge of Improving Benefits While Moderating Costs
Source: Center for State and Local Government Excellence
Like all employers, state and local governments must control health care costs while still offering competitive benefit packages that will attract and retain talented employees. Eight states that have adopted innovative practices to reduce costs and improve employees’ health are featured in this publication, which comes out of a joint Center for Excellence-North Carolina State University symposium that addressed both national trends and a rich variety of lessons learned from state innovations.
2012 Deloitte Survey of U.S. Employers
2012 Deloitte Survey of U.S. Employers
Source: Deloitte
U.S. employers are concerned about continued rising health care costs; however, they are unaware of solutions that could improve the safety and quality of care, and simultaneously reduce cost. While employer-sponsored health benefits are not likely to disappear, changes that shift financial risk to employees are certain.
These are among key findings in Deloitte’s 2012 survey of employers with 50+ workers offering health benefits. The survey explores employers’ opinions about the U.S. health care system, the Affordable Care Act (ACA), and anticipated strategies for employee health benefits coverage and cost containment. Participants include C-suite executives and human resource (HR) professionals.
New High Interest GAO Report — Patient Protection and Affordable Care Act: Estimates of the Effect on the Prevalence of Employer-Sponsored Health Coverage
New GAO Report
Source: Government Accountability Office
Patient Protection and Affordable Care Act: Estimates of the Effect on the Prevalence of Employer-Sponsored Health Coverage. GAO-12-768, July 13.
http://www.gao.gov/products/GAO-12-768
Highlights – http://www.gao.gov/assets/600/592412.pdf
Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?
Source: Employee Benefit Research Institute
This Issue Brief examines issues related to private health insurance exchanges, possible structures of an exchange, funding, as well as the pros, cons, and uncertainties to employers of adopting them. A summary of recent surveys on employer attitudes are examined, as are some changes that employers have made to other benefits that might serve as historical precedents for a move to some type of defined contribution health benefits approach.
- The combination of insurance market reforms and the embodiment of the exchange structure in the Patient Protection and Affordable Care Act (PPACA) has brought a renewed focus on limiting employer’s health care cost exposure.
- The key provisions of PPACA influencing these considerations are not the availability of exchanges per se, but a number of insurance market reforms that are combined with the exchanges, such as guaranteed issue, modified community rating, premium and cost sharing subsidies, and increased choice of health plan.
- Following the growth of defined contribution (DC) retirement benefits, DC health benefits were seen as promising tools to help control employer benefit costs by capping the employer’s per-worker insurance contribution and engaging workers in their health care choices.
- Employers never moved in the direction of giving workers a defined or fixed contribution to purchase health insurance for a number of reasons: They were hesitant to drop group coverage in favor of offering individual policies, and they were concerned that many employees would not be able to secure coverage in the individual market.
- Employer issues addressed with an exchange/fixed contribution approach include cost certainty, total compensation transparency, uniformity of benefits in multi-state environments, COBRA costs, the looming excise tax on high cost coverage (the so-called “Cadillac tax”) under PPACA, the potential for reduced administrative costs, and higher employee satisfaction.
- Employer issues that need to be addressed in adopting a private exchange/fixed contribution approach include plan design, implications of adverse selection, setting the level of fixed contribution, the amount of plan choice, and geographic cost variation.
- Issues not addressed by an exchange/fixed contribution approach include worker preference of, and satisfaction with, employment-based coverage, group purchasing efficiencies, the role of employer as advocate in coverage disputes, delivery innovation and health care quality, and health literacy issues.
2012 Deloitte Survey of U.S. Employers: Opinions about the U.S. Health Care System and Plans for Employee Health Benefits
Source: Deloitte
From press release:
U.S. employers are concerned about continued rising health care costs; however, they are unaware of solutions that could improve the safety and quality of care, and simultaneously reduce cost. While employer-sponsored health benefits are not likely to disappear, changes that shift financial risk to employees are certain.
These are among key findings in Deloitte’s 2012 survey of employers with 50+ workers offering health benefits. The survey explores employers’ opinions about the U.S. health care system, the Affordable Care Act (ACA), and anticipated strategies for employee health benefits coverage and cost containment. Participants include C-suite executives and human resource (HR) professionals.
Own-to-Rent Transitions and Changes in Housing Equity for Older Americans,’ and ‘Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey
Own-to-Rent Transitions and Changes in Housing Equity for Older Americans,’ and ‘Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey
Source: Employee Benefit Research Institute
Own-to-Rent Transitions and Changes in Housing Equity for Older Americans
- Owning is the most common housing arrangement for older Americans: At age 65, more than 8 in 10 Americans report living in houses they own.
- The transition rate from home ownership to renting is 3 percent at age 50, bottoming out at 1.6 percent at age 65. However, these transition rates increase after age 85, reaching a peak of 4.7 percent at age 90.
- Death of a spouse is the most common factor associated with a transition from owning to renting. The next common factor is a drop in household income.
- Median household income for those between ages 50 and 64 who continue to own their home is $79,758, while those who shift from owning to renting in that same age group have a median household income of $53,520.
- Ownership rates are very different for couples and singles, but don’t change a lot across owners’ ages. The home ownership rate hovers around 90 percent for couples and 60 percent for singles.
Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey
- Nearly one-half (47 percent) of covered workers had a choice of health plans in 2011.
- Forty-two percent of large firms offered two or more choices of health plans, compared with 15 percent of smaller firms. Half of consumer-driven health plan enrollees reported that they chose that offering because of the lower premium, while 45 percent reported that the opportunity to save money in the account for future years was a primary reason.
- Among individuals with traditional health coverage, 39 percent cited the good network of providers and 32 percent reported the low out-of-pocket costs as the main reasons for enrolling in the plan.
New From the GAO
New GAO Reports
Source: Government Accountability Office
1. Air Pollution: EPA Needs Better Information on New Source Review Permits. GAO-12-590, June 22.
http://www.gao.gov/products/GAO-12-590
Highlights – http://www.gao.gov/assets/600/591820.pdf
2. Children’s Health Insurance: Opportunities Exist for Improved Access to Affordable Insurance. GAO-12-648, June 22.
http://www.gao.gov/products/GAO-12-648
Highlights – http://www.gao.gov/assets/600/591798.pdf
3. Debt Limit: Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs. GAO-12-701, July 23.
http://www.gao.gov/products/GAO-12-701
Highlights – http://www.gao.gov/assets/600/592834.pdf
4. Federal Workers: Results of Studies on Federal Pay Varied Due to Differing Methodologies. GAO-12-564, June 22.
http://www.gao.gov/products/GAO-12-564
Highlights – http://www.gao.gov/assets/600/591816.pdf
5. Surface Transportation: Financing Program Could Benefit from Increased Performance Focus and Better Communication. GAO-12-641, June 21.
http://www.gao.gov/products/GAO-12-641
Highlights – http://www.gao.gov/assets/600/591783.pdf
6. Financial Literacy: Overlap of Programs Suggests There May Be Opportunities for Consolidation. GAO-12-588, July 23.
http://www.gao.gov/products/GAO-12-588
Highlights – http://www.gao.gov/assets/600/592850.pdf
7. K-12 Education: Selected States And School Districts Cited Numerous Federal Requirements As Burdensome, While Recognizing Some Benefits. GAO-12-672, June 27.
http://www.gao.gov/products/GAO-12-672
Highlights – http://www.gao.gov/assets/600/591931.pdf
Healthcare Coverage and Disability Evaluation for Reserve Component Personnel: Research for the 11th Quadrennial Review of Military Compensation
Because Reserve Component (RC) members have been increasingly used in an operational capacity, among the policy issues being addressed by the 11th Quadrennial Review of Military Compensation (QRMC) is compensation and benefits for the National Guard and Reserve. As part of the review, RAND was asked to analyze healthcare coverage and disability benefits for RC members, including participation in the TRICARE Reserve Select (TRS) program, the potential effects of national health reform on coverage rates, and disability evaluation outcomes for RC members. This report summarizes the results of RAND’s analysis. The author finds that 30 percent of RC members lack health insurance to cover care for non–service-related conditions. The TRS program offers the option of purchasing health insurance through the military on terms that are superior to typical employer benefits. Although program participation has increased, it remains low and TRS does not appear to be effectively targeting those most likely to be uninsured. TRS premiums are also lower than the premiums for the new options that will be available under health reform and the same as the penalty for not being insured. So health reform is likely to increase TRS enrollment. Finally, previously deployed RC members are referred to the Disability Evaluation System at a much lower rate than Active Component (AC) members, even for deployment-related conditions, but those who are referred receive dispositions (and thus benefits) similar to those for AC members. These findings suggest that the Department of Defense may want to consider ways to better coordinate TRS with other insurance options that will be available to RC members and that the identification of RC members who experience health consequences from deployment leading to disability merits further investigation.
The Effect of Health Insurance Coverage on the Use of Medical Services
The Effect of Health Insurance Coverage on the Use of Medical Services (PDF)
Source: American Economic Journal (via Michael Anderson)
Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. We exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions.
Give Me Liberty or at Least Your Votes: A Study of Governors’ Altruism on Health Care
Give Me Liberty or at Least Your Votes: A Study of Governors’ Altruism on Health Care
Source: Brookings Institution
“Give me Liberty or give me Death,” proclaimed Patrick Henry in defense of revolution. In many ways, more than a few Republican governors over the past several months have embraced this mantra in criticizing the president’s health care law. They view the law as an affront to basic liberty, and while it would deliver assistance to their constituents that could prevent illness or death, liberty is of greatest import.
Elected officials have the choice of representing the needs or views of those who put them in office or stand on principle to do what they believe is right. Officials often frame their views of the health care law in terms of the latter. Democrats and progressives view the law as a means of opening access to affordable health insurance for more Americans. Republicans and conservatives describe the law as a government overreach that threatens the basic liberties that all Americans enjoy and must retain.
Regardless of the needs of constituents, elected officials’ values appear to be a driving force. In a basic way, states with lower rates of uninsured often have Democratic governors or are traditionally blue states, and states with higher uninsured rates more commonly have Republican governors or are traditionally red states.
Health Insurance Enrollment and Bankruptcy Decisions
Health Insurance Enrollment and Bankruptcy Decisions (PDF)
Source: University of Wisconsin (Xiaodong Fan and Berk Yavuzoglu)
Unlike many other developed countries in the world, the United States does not have an universal health care system. It has been debated for years, dated back at least to Clinton presidency. However, Americans have the option of using bankruptcy as an implicit health insurance. This paper aims to study the joint decision of bankruptcy and health insurance enrollment in a dynamic model framework using micro-level data.
Mandate-Based Health Reform and the Labor Market: Evidence from the Massachusetts Reform
Mandate-Based Health Reform and the Labor Market: Evidence from the Massachusetts Reform (PDF)
Source: National Bureau of Economic Research (via Wharton School)
We model the labor market impact of the three key provisions of the recent Massachusetts and national \mandate-based” health reforms: individual and employer mandates and expansions in publicly-subsidized coverage. Using our model, we characterize the compensating di erential for employer-sponsored health insurance (ESHI) | the causal change in wages associated with gaining ESHI. We also characterize the welfare impact of the labor market distortion induced by health reform. We show that the welfare impact depends on a small number of \sucient statistics” that can be recovered from labor market outcomes. Relying on the reform implemented in Massachusetts in 2006, we estimate the empirical analog of our model. We nd that jobs with ESHI pay wages that are lower by an average of $6,058 annually, indicating that the compensating di erential for ESHI is only slightly smaller in magnitude than the average cost of ESHI to employers. Because the newly-insured in Massachusetts valued ESHI, they were willing to accept lower wages, and the deadweight loss of mandate-based health reform was less than 5% of what it would have been if the government had instead provided health insurance by levying a tax on wages.
