In Give and take, I noted that the cost of non-wage benefits can be a brake on
business hiring and depress wages, and that in recent years the cost of total
compensation for U.S. workers has risen as a share of national income but wages
have declined, as employers trim wage outlays to cover rising non-wage costs.
No non-wage benefit costs
more than health insurance. The misperception persists – mainly because so many
on the social right keep saying it – that private health insurance is cheaper
than “government” insurance such as Medicare. It only seems cheaper because so many Americans directly pay only a fraction of the costs.
According to a new report from Milliman, which describes
itself as among the world’s largest providers of actuarial services, it
costs an average of $23,215 to cover a family of four under employer-sponsored preferred provider health insurance plans. Write Sarah Kliff,
This includes what the family pays for their
monthly premium, what the employer contributes and any out-of-pocket costs
incurred over the course of the year. That’s more than double the cost a decade
ago when, in 2004, coverage cost $11,192. Employers cover just over half the
costs, paying for 56 percent of the average premium in 2014. Workers
contributed $5,908, on average, in premium s and another $3,787 on
out-of-pocket costs when they turned up at the doctor.
Kliff adds that while overall cost growth is slowing, companies are not
passing those savings on to employees, but are asking employees to pay a bigger
chunk than ever of their insurance bills.
This article appears in May 22-28, 2014.
