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FEDlogic's February Newsletter
The Hidden Costs of Increasing Health Care Premiums on US Workers
In the landscape of American healthcare, the rising costs of employer-sponsored health insurance (ESI) premiums have become a growing concern, impacting families' earnings and exacerbating income inequality. A recent economic evaluation1 sheds light on the significant association between escalating health insurance premiums and reduced annual wages, particularly among US families with ESI.
The study, conducted from 1988 to 2019, analyzed data from various national surveys to quantify the impact of rising health insurance premiums on earnings, disparities in earnings by race and ethnicity, and wage stagnation among families with ESI. The findings revealed a concerning trend: health care premiums as a percentage of compensation more than doubled over the 32-year period, significantly outpacing earnings growth for US families with ESI.
The analysis highlighted the disproportionate burden of increasing premium costs on lower-wage workers. Families at the 20th percentile of earnings faced health care premiums that accounted for a staggering 28.5% of their compensation, compared to only 3.9% for families at the 95th percentile.
The cumulative impact of escalating health insurance premiums over three decades was substantial, with the median US family with ESI experiencing approximately $125,000 in lost earnings by 2019. This translates to a significant hindrance in economic progress and stability for affected families.
The study underscores the need for further research and policy initiatives to address the repercussions of rising healthcare premiums on employee wages and income inequality. It also emphasizes the importance of examining how these trends contribute to broader disparities in healthcare access and financial well-being, particularly among marginalized communities.
In conclusion, the study sheds light on the hidden costs of increasing healthcare, considering the long-term implications of rising premiums on income inequality and overall household financial health.
With these increases, it’s important to know where you can turn to understand how to keep your costs low and still provide quality employee benefits. FEDlogic can serve as an extension of your HR team to help answer questions about federal and state benefits and when an employee or their household member may qualify for a federal or state healthcare alternative.
1 Warren-Findlow, J., Rodríguez-Díaz, C., Ortega-Williams, A., & Zeng, L. (2022). Association of Health Care Premium Growth With Earnings Inequality and Wage Stagnation Among US Families With Employer-Sponsored Health Insurance, 1988-2019. JAMA Network Open, 5(1), e2138776.
https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2813927
Understanding Healthcare Costs and Trends: A Comprehensive Analysis for Employers and Individuals
In the modern landscape of employer-sponsored health insurance, the complexities of healthcare costs and trends can significantly impact both companies and their employees. In 2023, FEDlogic conducted a study in collaboration with the actuarial firm, Perr&Knight, delving into the intricacies of healthcare expenditures in the United States, aiming to provide valuable insights for employers and individuals alike.
Employer-sponsored health plans are prevalent in the United States, with over 60% of companies offering self-insured plans to their employees. However, the financial implications of high-cost medical conditions pose challenges for both employers and individuals. FEDLogic, LLC. specializes in optimizing healthcare coverage by leveraging federal programs, aiming to reduce costs and improve quality for employers and employees.
Findings
Perr&Knight conducted an evaluation of annual healthcare costs in the U.S. to assist FEDLogic in assessing potential savings for employers and individuals. The study covered various aspects, including:
Average Healthcare Costs: Healthcare spend per capita varies by age and gender, with significant differences across age groups.
Healthcare Costs for Persons Eligible for Federal Benefits: Individuals eligible for federal programs exhibit substantially higher claim costs compared to the general population.
High-Cost Medical Conditions: Conditions such as disabilities, cancer, diabetes, and ALS incur substantial annual costs and prevalence rates.
Pregnancy/Newborns and Children: Pregnancy and newborn complications contribute to high healthcare costs, necessitating comprehensive coverage.
Healthcare Trends: Healthcare costs in the U.S. have been steadily increasing, outpacing wage growth and inflation.
Catastrophic Claims: Instances of million-dollar healthcare claims are rising, particularly among certain age groups.
Gene Therapy and Specialty Pharmaceuticals: Innovative treatments like gene therapy come with significant costs, posing financial challenges for employers and individuals.
Actuarial Analysis
The methodology employed in the study aligns with industry standards and incorporates data from reputable sources such as the CDC, CMS, Census Bureau, and healthcare research organizations. Projection of future healthcare costs adheres to established methodologies endorsed by actuarial bodies.
In conclusion, the study underscores the importance of informed decision-making regarding healthcare benefits for employers and individuals. By understanding the nuances of healthcare costs and trends, employers can navigate the complex landscape of healthcare coverage more effectively, ultimately improving financial outcomes and ensuring access to quality care.
To request a copy of the complete actuarial analysis completed by Perr&Knight for FEDlogic, please contact Kate Kellner, Director of Client Services, at [email protected].
FEDlogic’s Monthly Webinar Series
Hosted the last Wednesday of each month at 1:00pm CST, our webinars are designed to provide your employees with valuable insights and knowledge on various federal and state benefits topics.
February’s webinar includes an overview of federal benefits, how FEDlogic can help, and an in-depth look into benefits such as Disability for those unable to work and major illnesses like late-stage cancers, terminal illnesses, ALS, and ESRD.
We take a deep dive into a different topic nearly every month. Don't miss this opportunity to learn about the FEDlogic experience along with your employees and teammates. For those unable to attend the live sessions, the webinars are recorded and available to access through the employee resources page on our website.
Register now and secure your spot for our upcoming webinars in 2024 by clicking on the image below!
Client Feature: Lee Enterprises
Lee Enterprises is a subscription and advertising platform for daily news. Lee is based out of Davenport, Iowa, servicing 26 states. They are a leading provider of daily news holding an average daily circulation of 1 million copies within a year. Lee continues to provide the best service to their ever-growing diverse consumers.
Thank you for placing your trust in FEDlogic. We are grateful for the opportunity to serve your families.
Check out the FEDlogic LinkedIn page for this and all new client features.
A Letter from Our COO
My name is Anita Blackmer, and I was very fortunate to secure my dream job in December of 2019 when I joined FEDlogic. I am now able to work for a company that truly helps families that are struggling with complex medical situations, reeling after the death of a loved one, planning for retirement, or otherwise navigating the complex world of federal and state benefits. I joined FEDlogic because I believe in this mission, and I want to contribute to helping those families.
Prior to joining FEDlogic, I was a benefits consultant at HUB. Through many years in the private insurance industry, I had seen that both employers and consultants struggled to understand federal and state benefits. FEDlogic was the answer to helping families understand these benefits and applying for them if needed. Since joining the team here, I have enjoyed sharing with employers how we can help their employees as they struggle to navigate this system through tragedy or life transitions.
My passion for this industry arises from a personal tragedy: my father died in a car accident when I was only thirteen years old. Looking back, I recognize that my mother could have used help as she worked through both intense grief and also the financial impact of losing my father. FEDlogic was exactly what she needed as she navigated that change.
I did not anticipate needing the benefits of FEDlogic for myself, but on February 4th of this year, I lost my husband very unexpectedly after a brief stay at a local hospital. After 44 years of a wonderful marriage, two children, many grandchildren, and countless memories, to say that I am devastated would be an understatement. Shortly after, one of our experts reached out to comfort me, and while we were talking, I asked him about my current situation after my husband’s passing. He was able to talk me through Mike’s Social Security benefits, medicare, and federal benefits for widows. He gave me advice that will help me financially now and advice for when I reach my full Social Security retirement age. I needed his financial guidance yesterday, and I am so glad that he was able to assist me.
I am typically a very private person, but I wanted to share my story with each of you as a personal example of how FEDlogic can make a huge difference for all of your employees. Thank you for trusting us to help your employees in situations like these and many more.
Anita Blackmer, Chief Operations Officer
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