Health Insurance Costs Now Top $20,000 a Year

Health Insurance Costs Now Top $20,000 a Year

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Plus, Trump’s power plays with federal funds
Wednesday, September 25, 2019

Like Buying a New Car Every Year: Health Insurance Costs Hit New High

The average cost of employer-provided health coverage now tops $20,000 for a family plan, according to a new survey by the nonprofit Kaiser Family Foundation.

Annual premiums for an employer-provided family plan rose to $20,576 this year, up 5% from last year, the annual survey found, with workers paying an average of just over $6,000 toward their coverage, up 8% year over year.

“It’s the cost of buying an economy car, just buying it every year,” said Drew Altman, president and CEO of the foundation.

Since 2009, average family premiums have risen 54% and workers’ contributions have soared 71%, far faster than the growth in wages (26%) and inflation (20%), according to the foundation.

“The single biggest issue in health care for most Americans is that their health costs are growing much faster than their wages are,” Altman said. “Costs are prohibitive when workers making $25,000 a year have to shell out $7,000 a year just for their share of family premiums.”

Deductibles rising, too: The average deductible for individual coverage, or the amount employees have to pay out of pocket before their insurance begins covering claims, rose to $1,396, up from $1,350 last year and $533 a decade ago. More than 80% of covered workers now have a deductible, up from 63% a decade ago. Taken together, the increasing prevalence and cost of deductibles have resulted in a 162% total increase in the burden of deductibles across all covered workers over the past decade, the foundation says. More than one in four covered workers is now in a plan with a deductible of at least $2,000.

Working poor hit hardest: The survey also found that employers with many lower-wage workers — those earning $25,000 or less a year — tend to offer health benefits to a smaller share of their workforce than other employers and require higher worker contributions toward their premiums. At firms where at least 35% of employees make $25,000 or less, family premiums average about $17,600, some 15% less than the average at other firms. But those workers at lower-wage firms have an annual family contribution of over $7,000, compared to an average of under $6,000 at other firms. The result is that a far lower share of low-wage employees take the health benefits being offered. Only one in three workers at lower-wage businesses offering health benefits are covered, compared to 63% at other employers.

The Kaiser survey was conducted by telephone between January and July. It included 2,012 randomly selected employers with three or more workers.

For more on the survey results, See Kaiser’s summary of findings or the full report.

Quote of the Day

"There's a growing chorus to eliminate your industry entirely.”

– Centers for Medicare and Medicaid Services Administrator Seema Verma, warning insurers in a speech at their industry trade association’s 2019 National Conference on Medicare that growing frustration among patients, doctors and politicians means that insurers must adapt or face the possibility they’ll “go extinct.”

Verma told the insurance professionals gathered that they should see a vote by nearly half the delegates at this year’s American Medical Association annual meeting to endorse Medicare for All as "the canary in the coal mine, warning of very real danger to the health insurance industry." And she urged the private insurers to “reduce administrative complexity, become more transparent, and help us accelerate the adoption of value-based care.”

Senate Again Votes to Block Trump’s National Emergency, but Short of Veto-Proof Majority

The Senate voted 54-41 Wednesday to disapprove of President Trump’s national emergency declaration and his shifting of Pentagon funds toward construction of barriers along the southern border.

The vote, forced by Democrats, was the Senate’s second effort at overturning Trump’s emergency declaration, following a previous vote in March. As with that first vote, the Senate tally once again fell shy of the 60 needed to override a presidential veto, meaning that lawmakers won’t be able to block Trump from diverting military funds toward his wall. Eleven Republicans joined with Democrats in voting for the resolution of disapproval on Wednesday.

Even so, the vote gave Democrats an opportunity to highlight Republican support for Trump’s diversion of military funds. “When senators last voted on the issue, the Pentagon had not released a list of the $3.6 billion in military construction projects that were being canceled to pay for Trump’s border barrier,” The Washington Post notes. “But it was released earlier this month, and senators have a list of the specific projects in their states that are being scrapped to free up funding for Trump’s wall." That dynamic created new pressure for GOP senators, especially those up for reelection in 2020, to weigh their allegiance to Trump and his border wall against their support for much-needed projects at military bases and installations back home.”

Bloomberg’s Laura Litvan writes that the new vote “could have some political bite for Republicans up for re-election in 2020 who have military installations in their states, including Thom Tillis of North Carolina, Martha McSally of Arizona, Cory Gardner of Colorado and John Cornyn of Texas.”

But whatever increased pressure GOP lawmakers may have felt, it didn’t change any votes. Cornyn, whose state is losing more than $38 billion in funding for military projects, deemed such concerns “way too parochial,” according to the Post, and predicted that the diverted funds would be replenished by Congress.

The bottom line: Congress failed to override Trump’s veto last time and this resolution of disapproval is expected to meet the same fate.

Number of the Day: 500,000

The Trump administration’s effort to tighten the rules for food stamp eligibility could result in a half-million children losing access to free school lunches, according to an unpublished analysis by the Department of Agriculture.

The White House wants to end the practice, currently in use in 43 states, of automatically enrolling participants in the Temporary Assistance for Needy Families program in the Supplemental Nutritional Assistance Program, commonly called food stamps. The rule change would remove an estimated 3 million people from SNAP, including more than 500,000 children who were also automatically enrolled in free school lunch programs.

The comment period for the rule change closed on Monday, and if it takes effect, school children will be affected next year. In a letter Monday, Democrats on the House Committee on Education and Labor asked Agriculture Department Secretary Sonny Perdue to withdraw the proposed rule, in part because the department failed to makes its school lunch estimate public. A spokeswoman for Republicans on the committee said Democrats’ concerns were unwarranted, since most students who could be removed due to the rule change will still qualify for free lunches under other criteria.

Trump’s Power Plays with Federal Funds

President Trump withheld $250 million in military assistance funds from Ukraine for several weeks and stands accused of doing so in order to pressure the country’s president into investigating a political opponent — an accusation the president denies. Politico’s Jennifer Scholtes and Caitlin Emma point out that the president is no stranger to using or trying to use government funds for his own objectives, listing six such episodes since Trump won the White House.

“The Constitution may give Congress the power of the purse, but that hasn’t stopped the president from pushing beyond his predecessors to ignore Capitol Hill and do what he wants with the federal budget,” they write.

Here are three of the incidents they discuss:

Border wall: Empowered by his declaration of a national emergency, Trump is shifting $3.6 billion from military construction projects to build more barriers on the border with Mexico.

Immigration enforcement: At the Department of Homeland Security, Trump has shifted $155 million in federal disaster aid to immigration enforcement.

Foreign aid: The White House attempted to freeze more than $4 billion in foreign aid just before the end of the fiscal year, which could have effectively eliminated it. However, the administration backed off after complaints from Congress.

See the full analysis at Politico.

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