Rising Health Care Costs Spur Policymakers, Business Leaders To Consider Shift Away From Employer-Sponsored System

Main Category: Health Insurance / Medical Insurance
Article Date: 14 Nov 2007 - 8:00 PDT

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The number of U.S. residents who receive employer-sponsored health coverage "is continuing to shrink, raising anxiety among workers and invigorating a debate about whether insurance should be tied to jobs," USA Today reports.

Although the idea of eliminating the employer-sponsored health system has been considered before, it is "taking on a new life," according to Paul Fronstin of the Employee Benefit Research Institute. Policymakers, politicians and some business leaders are considering a number of strategies that reflect "the differing philosophies about the direction" the country should move: "either toward a health insurance market in which people buy policies on their own while armed with tax credits or deductions, or one in which people are able to buy insurance through group-like 'exchanges,' with some government oversight," USA Today reports.

Although several states -- including Massachusetts, Vermont and Maine -- have begun efforts to overhaul their health care systems, "no big changes will occur nationally until well after the November 2008 election," according to USA Today.

Meanwhile, employers are offering coverage at a lower rate or shifting more costs to workers. An annual survey released in September by the Kaiser Family Foundation and Health Research and Educational Trust found that the total percentage of employers offering health coverage declined from 69% in 2000 to 60% in 2007. In addition, the survey found that worker premiums for family health coverage increased by 70% since 1999 when adjusted for inflation.

However, Fronstin said, "Employer coverage won't go away overnight, unless there's a major change to federal legislation that oversees health insurance," adding, "Employers don't have to offer it, but they see a business case for offering it, and they don't (currently) see a viable alternative" (Appleby, USA Today, 11/13).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.