Average Family Premiums Rose 4% This Year To $22K Due To Healthcare Use Decline: KFF

Health insurance form payer plan enroll

Source: Fierce Healthcare, by Robert King

The annual family premiums for employer-sponsored health plans increased by 4% in 2021 to an average of $22,221 as the COVID-19 pandemic blunted massive premium hikes, a new survey finds.

The Kaiser Family Foundation released its 2021 employer health benefits survey Wednesday, which explored the employer benefits and cost-sharing offered for plans. The survey also found more employers added new mental and behavioral health benefits likely linked to the pandemic.

“In a year when the pandemic continued to cause health and economic disruption, there were only modest changes in the cost of employer-provided health benefits,” Gary Claxton, KFF’s senior vice president, said in a statement. “Some employers adapted their plans to address mental health and other challenges facing their workers during COVID-19.”

This year, 59% of employers offer health benefits, which has largely been unchanged over the past decade. Larger employers are the most likely to offer coverage, with 99% of companies with at least 200 or more workers and 56% of firms with fewer than 50 offering coverage.

The survey found that the average annual premium for individual coverage was $7,739, and workers contributed nearly $6,000 for family coverage costs, with employers picking up the rest.

The premiums increased by 4% compared to 2020, but, overall, there has been a 22% increase in premiums from 2016 to 2021.

KFF experts said part of the reason for the decline was low healthcare use caused by the COVID-19 pandemic.

“We asked employers between January and July if [healthcare use] was above or below expectations during last quarter. A third said use [was] still lower than anticipated,” said Matthew Rae, the study’s author, during a press briefing.

Kaiser also found that half of large employers with at least 200 workers said healthcare use was about what they expected in the most recent quarter. Another 18% said it was above expectations.

The pandemic also caused employers to invest more in mental and behavioral health benefits for workers. Overall, 39% of firms with 50 or more employees made changes to their benefits in 2021 to meet mental health needs.

The most popular new benefit (which 31% of plans offered) was to expand ways through which employees can get mental health services including via telemedicine. Another 16% of employers that have 5,000 or more employees added more mental health and substance abuse providers to their plan networks.

The survey also found 55% of firms with at least 50 workers altered their wellness programs in response to the pandemic, with 43% of those employers offering more online counseling services.

Employers expanded telehealth benefits in other areas, too.

“Nearly two-thirds (65%) of offering firms with at least 50 workers say they made changes related to telemedicine due to the pandemic,” Kaiser said in a release. “Half (51%) did additional promotion of their telemedicine benefits to workers and 31% expanded coverage for additional modes of telemedicine.”

Telehealth use expanded dramatically during the pandemic as patients avoided going to the doctor’s office for fear of contracting the virus, and Medicare made it easier for providers to get reimbursed for such services.

Workers still face high deductibles

Kaiser found the average single deductible was at $1,669 for workers, which was only up slightly compared to the $1,644 in 2020. But deductibles have skyrocketed over the past decade, with deductibles in 2011 at $991.

“This year 85% of covered workers have a deductible in their plan, up from 74% a decade ago,” the release said.

Smaller companies that have fewer than 200 workers also face higher deductibles than larger firms, with $2,379 for such small employers compared to $1,397.

The survey also shared what employers think of a landmark price transparency rule that requires hospitals to post their prices for certain comparable services.

About 26% of companies that have at least 200 workers believe the information can help assist workers with their healthcare decisions by a “great deal.” But only 3% believe the requirements can reduce spending by a great deal.

Kaiser’s survey was conducted between January and July of this year and included 1,686 companies with three or more employees. Another 2,413 firms responded to a question on offering coverage.

Last Updated 12/01/2021

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