Study Reveals Employees Paying More for Less Coverage


Three of the main selling points of Obamacare were more affordable premiums, better coverage and pre-existing conditions would now be covered.

Even before the Affordable Care Act went into effect, healthcare costs started increasing. I personally know of one employer who was told that their existing healthcare plan would increase by 41% and that was the year prior to Obamacare.

I know of another person whose employer provided healthcare coverage cost them more and their coverage was for less than previously. They were told that in order to keep the amount of coverage they had before that it would cost everyone too much.

So it was no real surprise to me when I read that the nonprofit group Commonwealth Fund found that employees are paying more for less coverage under Obamacare. They stated that healthcare insurance premiums amounted to 5.3% of the median income for the average family with members under the age of 65. In 2010, when Obamacare was passed, healthcare insurance premiums increased to 8.4% of the median family income. In 2013, under the first real year of Obamacare, the cost increased to 9.6% of the median income for an American family.

Not only did they discover that employees are paying more for their employer provided healthcare, but they are getting less for their money than previously. One of the authors of the report stated:

“Workers are paying more but getting less protective benefits. Although the Affordable Care Act offers a platform from which to build, securing a more affordable future will likely require action beyond those reforms, focusing on costs of care, particularly for the privately insured.”

The report also went on to say that employee’s wages have been fairly stagnant meaning that the increased costs for less are taking an ever greater toll on them financially.

Another aspect of the report said that the increase in costs of healthcare premiums has slowed down in the past couple of years, but they also attribute some of that slowdown to the overall economic slowdown. As the economy slowed, the demand for healthcare services also slowed.

Part of the slowdown in increasing costs is due to some of the measures taken by many employers. A number of employers increased the deductible amounts that employees have to pay in order to keep their costs from going to too high.

There was one aspect that could affect the average increases in healthcare premiums for employees that the report did not mention. Many employers have reduced their costs by dropping employees from 40 hours per week to less than 30 hours. By reducing employees’ paychecks by 25% or more, employers no longer had to provide expensive healthcare benefits for those employees thus preventing any employee cost increases.

The bottom line from the Commonwealth Fund report and others that have been conducted lately is that employees are paying more for less as a direct result of Obamacare. I don’t call this progress unless you own stock in the insurance companies.

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