How Small Businesses Can Survive The Rising Tide Of Healthcare Costs

February 16 01:00 2016 by ushadmin

Five years after the ACA* became law, the pattern is becoming clear:

-Health insurance coverage in the U.S. has increased overall, however, the number of Americans with employer sponsored health insurance (ESHI) has declined since 2000.

-Only 56% of smaller businesses (< 200 employees) offer ESHI versus 98% for larger businesses, and the small business coverage rate has declined by a fifth since 2000. However, more than half of small businesses still offer ESHI.

-Growth in healthcare costs in the U.S. has moderated, from 6-7% per year to slightly more than 4% in recent years, but is expected to re-accelerate to ~5% the over the next ten years. And healthcare cost growth continues to outpace average earnings, which are growing at ~2.5% per year.

-Employers have held down growth in employer healthcare premiums by shifting cost to employees. High-deductible plans, which typically have general annual deductibles of $1,500 per person or more, now cover 24% of ESHI beneficiaries.

-Recently, employers have begun to move to plans that limit provider choice to “narrow networks”. Narrow networks enable payers to negotiate more effectively with providers for lower prices, and may enable better care coordination. [However, I have not seen data that supports the second point.]…