The typical cost of health care for a family of four with employer-based insurance this year is $23,215, according to a new report from the Milliman actuarial firm.
The bad news first: That amount has more than doubled in the past 10 years. The goodish news: That cost grew just 5.4 percent between 2013 and 2014, the slowest growth rate since Milliman started keeping track in 2002.
That $23,215 figure isn’t what the employee pays, though. Employers pay about 60 percent of those costs ($13,520), while workers pay the rest through payroll deductions ($5,908) and out-of-pocket costs ($3,787).
The employee share of the costs have been rising faster — increasing 73 percent since 2007 – than the employer contribution, which has grown 52 percent over the same period. The Milliman numbers are for family coverage under preferred provider plans, so it excludes the increasing prevalence of consumer-driven health plans, in which employees handle a higher share of the costs.
Don’t blame the four-year-old Affordable Care Act for these changes, though. Milliman says Obamacare has barely had any impact so far on these large employer plans, but that’s about to change.
The actuarial firm cites Obamacare's impending excise tax on “Cadillac” plans – valued at at least $27,500 for family coverage starting in 2018 – as a factor that will force employers to scale back health plans.
Milliman points to other factors that will push down cost increases. Higher out-of-pocket costs are fueling efforts around health-care price transparency, and that's making consumers become better health-care shoppers. Conversely, an improving economy and an increase in expensive specialty drugs will pressure costs to rise.
Employer health plans have been undergoing a major transition and will continue to. They're increasingly looking at things like "reference pricing" and private health insurance exchanges, which put more responsibility on employees to control their health-care costs.
That's all to say that the strategies large employers ultimately adopt to keep down costs — and what employees can bear — are still evolving.