Employer health costs to rise nearly 9% this year, survey finds

Aaron Hodges sees nurse practitioner Gina Quigley at a CVS Minute Clinic in Los Angeles. Despite a dropoff in patient visits, employer health costs are still climbing by nearly 9%, survey shows.
(Cheryl A. Guerrero / Los Angeles Times)

Employer healthcare costs are expected to rise nearly 9% in 2014, a slight improvement over recent years, according to a new survey.

However, that modest decline doesn’t offer much relief to companies and their employees, who are seeing health insurance costs take a bigger bite out of their paychecks.

“Even though the decline is good news, most [health] plan sponsors still find 8% to 9% cost increases unsustainable,” said Harvey Sobel, a principal at Buck Consultants, a benefits consulting firm that surveyed 126 insurers and health plan administrators nationwide.


Those firms surveyed provide health benefits to 119 million people.

The report released Thursday found that costs for preferred-provider organization, or PPO, plans are expected to rise 8.7% this year. That’s down from 9% last year.

HMO plans should increase 8.6%, down just slightly from the previous year, according to Buck Consultants.

Some insurers surveyed cited patients’ lower use of medical care as the primary reason for the decreases.

“This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment,” Sobel said.

Overall, U.S. healthcare spending has been growing at historically low levels from 2009 to 2012, federal data show.

Many health economists and industry officials have attributed the slowdown primarily to lingering effects of the Great Recession, when millions of Americans cut back on medical care.


But the Obama administration and other experts have pointed to fundamental changes in healthcare reimbursement and the delivery of care spurred by the Affordable Care Act.

Even with the slowdown, the rise in health premiums continues to outpace inflation and wage growth.

For 2013, the average total cost for a family health plan rose 4% to $16,351, according to a closely watched survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

The typical employee’s share of that premium was $4,565, up about 6% from 2012. But the employer’s share of the premium increased just 3%, a further sign that employers continue to shift more medical costs onto their workers.