90% of large employers surveyed say government role is necessary to control health costs

April 30, 2021

Top executives at nearly 90% of large employers surveyed believe the cost of providing health benefits to employees will become unsustainable in the next five-to-10 years, and 85% expect the government will be required to intervene to provide coverage and contain costs, according to a new survey released from Purchaser Business Group on Health (PBGH) and Kaiser Family Foundation (KFF), with support from the West Health Institute. 

The research exposes large employers’ mounting concerns about the future of employer-sponsored coverage, with 87% of respondents saying they believe that the cost of providing health benefits to employees will become unsustainable in the next five to 10 years. 

More than 300 executive decisionmakers at companies with over 5,000 employees responded to the survey in December 2020 and January 2021. The survey report was released today in advance of a web briefing jointly held by PBGH and KFF examining the views of business leaders on health policy.

Annual family premiums for employer-sponsored health insurance reached $21,342 in 2020, up 55% since 2010 and increased at a rate at least twice that of both wages (27%) and inflation (19%). During the same period, the average single employee deductible increased from $917 to $1,644 among workers with a deductible.

Employer health plans are already paying much higher prices for healthcare goods and services than public plans: Hospitals across the country charge employers and private insurance companies an average of 2.5 times what they get from Medicare for the same care, and three or more times Medicare prices in a half-dozen states.

“Skyrocketing healthcare costs pose a significant threat to the prosperity of business and American workers. Every extra dollar spent on health care is one less dollar available for wages, investments and other essential business expenses,” said Shelley Lyford, President and Chief Executive Officer for West Health.

Among the central takeaways from the PBGH-KFF-West Health Survey:

·        Four-in-five respondents (87%) believe the cost of providing health benefits will become unsustainable in the next five to 10 years.

·         85% of respondents said the government will be required to play a greater role in providing healthcare coverage and containing costs in the next five-to-10 years; 83% said such actions would be better for their business and 86% said these actions would be better for their employees. 

·         92% of respondents believe policymakers should pursue policies that would strengthen anti-trust enforcement and prohibit anti-competitive conduct by providers, pharmaceutical manufacturers and health plans; 90% would support actions that improved the transparency of prices and the total cost of care.

·         More than one-third of respondents somewhat or strongly agreed with government policies that would cap prices for hospitals in markets with limited or no competition; limit prices charged by out-of-network providers; and negotiate prices for high-cost, sole-source drugs or set limits on drug price increases.

Relatively few respondents generally disagreed with proposals that would lower the age of Medicare eligibility to age 60 or create a new public plan coverage option, either for their own employees or the general public.

Kaiser Family Foundation has the release.