iLoveBenefits: Industry News Blog

Patient spending increases as costs are shifted to deductibles and coinsurance

According to a recent blog in the Wall Street Journal by Kaiser Family Foundation’s Drew Altman, while worker’s wages increased 32% from 2004 to 2014, here’s what happend to patient spending during that time period:

  • patient spending on deductibles increased 256%
  • patient spending on coinsurance increased 107%
  • patient spending on copays decreased 26%

Source: “The Next Big Debate in Health Care,” The Wall Street Journal/Think Tank, June 30, 2016,

What is the avg. cost per prescription for specialty drugs?



2015 Cost, By Condition, Of Specialty Drugs Based On Avg. Price Per Prescription


  1. Hepatitis C – $17,090.18
  2. Sleep Disorders – $8,928.96
  3. Oncology – $7,158.53
  4. Cystic Fibrosis – $6,441.27
  5. Multiple Sclerosis – $4,549.22
  6. Pulmonary Hypertension – $3,892.31
  7. Inflammation – $3,035.95
  8. HIV – $1,272,01


Notes: Mercer 2015 national survey of employer sponsored health plans & express scripts 2015 drug trend report


Source: Mercer

Putting a Positive Spin on a Critical Problem

53% of Exchange Consumers are Satisfied With Their Health Plan

Deloitte recently published their 2016 Survey of US Health Care Consumers. Here are some key findings from the report:

  • More than half (53%) of exchange consumers are satisfied with their health plan overall.
  • 54% of those with employer insurance and 74% of those with Medicare are satisfied.
  • 7 in 10 exchange consumers say they had no financial difficulty paying out-of-pocket costs last year.
  • 34% of exchange consumers feel prepared to handle future health care costs compared with 16% in 2015.
  • Nearly half of exchange consumers (45%) say they feel confident about being able to get affordable care.
  • 67% of exchange consumers looked online for help selecting a policy vs. 30% with employer coverage.

Source: Deloitte, May 11, 2016

Shifting the cost of health care

According to a recent analysis, total health care costs covered by employers have fallen by about 1% per year since 2012. Source: “2015 Records Lowest U.S. Health Care Cost Increases in Nearly 20 years,” Aon Media Center, November 12, 2015,

1% might not sound like a lot, but consider that on a roughly right basis if the cost of individual health care is $10,000 and the employer had been picking up 80% and the employee 20% a 1% shift is $80 PLUS the amount of the annual increase. If the increase is 6% then that’s an increase of $600 (of which the employee is paying an additional $120. So the total increase including the shift is @$200. So where they were paying $2000 (20% of $10,000) they are now paying 21% of $10,600 or $2226. That is an 11.3% increase year over year.

How has your health insurance deductible changed?

The average deductible among workers enrolled in a single coverage health plan with a deductible has risen:

  • For all firms, from $584 in 2006 to $1217 in 2014
  • For small firms (between 3 and 199 workers), from $496 in 2006 to $971 in 2014
  • For large firms (at least 200 workers), from $775 in 2006 to $1797 in 2014

Source: “Recent Trends in Employer-Sponsored Insurance,” figures, The Journal of the American Medical Association (JAMA), November 12, 2014,

How much will you need in retirement to cover health care expenses

According to projections in a recent report, in 2014, a man would need $64,000 in savings and a woman would need $83,000 if each had a goal of having a 50% chance of having enough money saved to cover health care expenses in retirement. Source: “Needed Savings for Health Care in Retirement Continue to Fall,” Employee Benefit Research Institute (EBRI) Press Release, October 28, 2014,

Why Is Health Care Price Transparency Important?

Here is a reason why it is important for consumers and patients to know what a health care expense is going to cost them out of their pocket:

49% of employees surveyed have less than $1,000 with which to pay for unexpected out-of-pocket medical expenses Source: “2014 Aflac WorkForces Report: Executive Summary,” Aflac, April 16, 2014,

Health care expenses are one of the leading causes of personal bankruptcy. Perhaps if people knew what things were going to cost ahead of time, or at least immediately following receiving a service, they might be better equipped to make rational consumer choices.

Employer and Employee Healthcare Costs

According to Towers Watson and the National Business Group on Health, employer-sponsored health benefits will increase in cost by 4.4% this year. In 2013 employer costs per employee were $9,157 and are expected to be $9,560 in 2014. Employees’ share of premiums increased nearly 7% to $2,975 this year. The total employee cost share was 34.4% in 2011 and is 37% in 2014. Employees pay $100 more a month for healthcare compared to three years ago. Publication Source: Employee Benefit News, April 15, 2014 Data Source: Towers Watson and the National Business Group on Health

Will employer plan sponsors maintain their cost leverage on Rx

Silver plans offered through the exchanges may require patients to pay more than twice as much out of pocket for prescription medicines as they would under a typical employer plan, offering employers a prime opportunity to use health care benefits as retention and recruitment tools for their employees.

Read more here:


What is the future for private exchanges

According to a recent survey of large employers with a median employee population of 23,000:

  • 91% believe they have a ‘good to excellent’ understanding of the complexities involved in moving to a private exchange
  • 60% said they would want to remain self-insured if they moved to a private exchange
  • 37% have no plans to evaluate private exchanges
  • 13% have done an evaluation and decided not to proceed with replacing their current medical benefit plan with an exchange
  • 35% said that they have started to evaluate private exchanges as a potential benefits strategy for active employees
  • 11% are interested in evaluating exchanges
  • 3% are currently in an exchange

Source: Large Employers ‘Fully Committed” to Company-Sponsored Benefits, Express Mixed Reaction to Private Health Insurance Exchanges.” Pacific Resources Press Release, April 29, 2014,

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