Jan. 7, 2016 — Lawmakers’ recent delay to adopt the Affordable Care Act’s Cadillac tax gives Congress time to make adjustments to the regulation. In the election year, healthcare once again will factor heavily into campaign rhetoric.
The delay, from 2018 to 2020, was included in a year-end tax and spending package that also makes the tax deductible for employers who pay it. The 40% nondeductible excise tax was intended to curb subsidies above a certain amount in order to control what some policy experts consider overly generous benefits. The first year’s threshold is $10,200 for self-coverage and $27,500 for family coverage.
Yet, some employers had already begun to make changes to the health plans they offer, continuing the trend to shift more healthcare cost burden to consumers. According to the Kaiser Family Foundation and Health Research & Educational Trust, 13 percent of large firms that offer health benefits reported making changes to avoid reaching the tax thresholds set in the 2010 health law.
In its 17th annual survey on medical benefits, Kaiser found that 8 percent of large firms, or those with more than 200 workers, said they switched to a lower-cost plan. Another change tied to the tax was consideration of limiting the number of doctors and other health providers that patients could use.
Single and family premiums for employer-sponsored health insurance increased an average of 4 percent in 2015. Since 2005, premiums have grown an average of 5 percent each year, compared to 11 percent annually between 1999 and 2005.
And as we all know, consumers are paying more out of their pockets for medical care through deductibles.
Researchers said that charting only the increase in deductible amounts over time doesn’t convey the full impact of consumers’ healthcare burden. We must also consider how rapidly the shift occurred. In less than 10 years, the number of people facing deductibles grew from 55 percent of covered workers to 81 percent.
Wages also have grown more slowly than costs such as deductibles.
Other key findings from the Kaiser/Health Research & Educational Trust poll include:
• The average annual premium for single coverage is $6,251, of which workers pay $1,071 on average. The family premium average is $17,545, with workers contributing $4,955 on average.
• About 81 percent of covered workers are in plans with a general annual deductible, which averaged $1,318 for single coverage in 2015. Workers in smaller firms, with less than 200 workers, faced an average deductible of $1,836, while those at larger firms, with at least 200 workers, had an average deductible of $1,105.