The Rising Cost of Family Coverage Is No Joke

You might have heard about this on the news. A new study is out that says employer-sponsored health insurance is getting really expensive.  (How expensive is it?) Hmm. May your employer cut back on your substance abuse benefits. (Laugh.) It’s getting so expensive that employed parents with health coverage are leaving their dependent children off their family health plans and enrolling them in public insurance programs to save money. (Aw.)

That’s how I imagine Johnny Carson would work a new Health Affairs study into his opening monologue on the Tonight Show.

But, Johnny is no longer with us, so I’ll take a crack at explaining it and why it’s a big red flag pointing to the increasing un-affordability of employer-based health insurance coverage.

Researchers from the Children’s Hospital of Philadelphia and the University of Pennsylvania looked at changes in the percentage of dependent children enrolled in two public health insurance programs—Medicaid and the Children’s Health Insurance Program—despite the fact that their parents had health insurance benefits through their employer.

The study pool was an average of about 44.8 million dependent children each year over the study period of 2008 through 2016. At least one of each child’s parents had employer-sponsored health insurance via their workplace.

The researchers divided the children into three groups based on their average annual household income:

• 100 percent to 199 percent of the federal poverty level (low income)
• 200 percent to 299 percent of the federal poverty level (moderate income)
• 300 percent or more of the federal poverty level (high income)

Then the researchers divided the children into three types of employers where their parents worked:

• Small private firms (private-sector companies with fewer than 200 employees)
• Large private firms (private-sector companies with 200 or more employees)
• Public-sector organizations (government or nonprofit employers regardless of the number of employees)

The researchers found that no matter what income level or place of employment, the percentage of children enrolled in Medicaid or CHIP rose from 2008 through 2016. For example:

• The percentage of children in moderate-income households enrolled in public health insurance programs  and whose parents were employed by small private firms rose to 64 percent in 2016 from 21 percent in 2008
• The percentage of children in moderate-income households enrolled in public health insurance programs and whose parents were employed by large private firms rose to 31 percent in 2016 from 15 percent in 2008
• The percentage of children in moderate-income households enrolled in public health insurance programs and whose parents were employed by public-sector organizations rose to 16 percent in 2016 from 14 percent in 2008

“The growth in enrollment is rooted in the declining affordability of employer-based dependent coverage, even among families employed at large private firms,” the researchers said.

In-other-words, employers are pushing premiums, co-payments and deductibles so high that they’re pushing their workers’ children onto the Medicaid and CHIP rolls. Boy, I’d hate to think that that was a deliberate tactic by employers to keep their healthcare costs down by making the rest of us pay more in taxes to fund Medicaid and CHIP. Nah.

“The consistency of the trend we identified suggests that demand for public health insurance for child dependents in working families will increase as additional families become sensitive to price increases for employer-sponsored insurance,” the researchers warned.

Push down one side of the healthcare cost balloon and the other side gets bigger.

The time to do something about healthcare affordability is now before the balloon pops.

For more on this topic, please read “An Unbearable Burden: Paying for Commercial Health Insurance” on 4sighthealth.com.

Thank you.