Private Sector Health Benefits Grew 17 Percent Faster Than Wages Last Year

blsReleased yesterday, the Bureau of Labor Statistics quarterly Employment Cost Index showed private sector health benefits increased 2.7 percent in 2016, versus only 2.3 percent for wages.

Overall, private-sector benefits grew only 1.8 percent, indicating non-health benefits would have grown little if at all. State and local government workers’ benefits grew 3.1 percent, 72 percent faster than private-sector benefits!

Remarkably, the ECI does not break health benefits out of state and local workers’ benefit costs, like it does for private workers. The better source for that is United Benefit Advisors annual Health Plan Survey. Wages of state and local workers increased 2.1 percent.

Although Obamacare has had an impact on employers’ health costs, it has not been as catastrophic as some anticipated. Nevertheless, employer-based health spending is still growing faster than wages, eating more of our paychecks.

Comments (5)

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  1. Ron Greiner says:

    How much does employer-based health insurance cost per employee? The Pasco County schools are spending a whopping $1,900 a month per family for Blue Cross PPO insurance.

    The Feds lose payroll tax and income tax on this $22,800 a year or $7,000 tax a year is lost for a low wage worker in the 15% income tax bracket. My Congressman Gus Bilirakis is in the 28% income tax bracket so the tax lost is $9,872 per year (28% + 15.3 = 43.3%)

    The Republican tax credits of only $3,300 for a 30-year-old couple and a child is so much cheaper so the Federal government saves a mountain of money. Plus, Republicans lift the cost of health insurance off of employers so the economy soars like never before.

    I have to train my congressman how to explain Republican health care reform. He is on the health sub-committee in DC.

  2. John Fembup says:

    Senator, according to CMS, annual national health expenditures in 2015 reached $9,990 per person. Of that amount, 11% was out-of-pocket, meaning public and private insurance (and self-funded employer plans) paid the rest = about $8,900 annually per person. Projecting that number forward for two years using the most recent trend rate of 5.8% per year, produces an expected per person average health spending for 2017 of about $10,000.

    Presently American family size is about 2.5 persons. That suggests average annual family health spending in 2017 – not including out-of-pocket costs – will be about $25,000. But this amount is not discounted for children whose expenses are less than for adults. Still, average annual family spending of $20,000 is certainly a reasonable estimate for 2017.

    You say Pasco County’s 2017 annual insurance premiums it pays to Blue Cross are running $22,800 per family.

    These premiums seem in line with the estimate of $20,000 average annual family spending. In fact, if Pasco County’s actual utilization experience is close to the national average, its medical spending would be about 88% of its Blue Cross premiums, which is in line with the group “loss ratio” requirements of Obamacare.

    I realize Senator that your comment is directed at taxes. But it seems to me you are also suggesting that the Blue Cross premiums are high because the health spending is high.

    Senator, I think you may be on to something!

    • Ron Greiner says:

      John, this might be a KGB plot to bring down America. When people have a zero deductible that pays 100% they will use as much health care as they can, like Medicare people with a supplement.

      These lonely old women and Barry wouldn’t see the handsome young MD today if they had to pay 1% of the cost. But they will spend other peoples money all day long.

      The KGB is probably behind Medicare, Medicaid and employer-based health insurance forcing America to our knees. Socialism is killing individual freedom in America.

      Pray for President Donald Trump getting Republican health care reform enacted so we can make America great again.

  3. Lee Benham says:

    Age and gender tables
    Table one shows personal health care spending per age group.
    I was surprised to see the 45-64 year old age group with the most expenditure of $787 billion.
    Table 2 shows the same age group spending $85 Billion in Medicare. (I would think under age 65 would be the sickest population)
    Table 3 shows the same age group spending $96 billion in Medicaid.
    Table 4 shows the same age group paying $394 billion in individual insurance premiums.
    Table 5 shows the same age group spending $100 billion on out of pocket costs.
    Table 6 shows the same age group spending $100 billion from other payers (whatever the hell that is)
    Table 7 shows the same age group spending per capita at about $9500
    The numbers seem to add up but then again they don’t. Almost half of costs are payed for by Medicare, Medicaid, out of pocket costs and other totaling $381 Billion.
    If these numbers showed the difference broken out with employer based health insurance and individual purchased I think we would see a large discrepancy in the premiums paid. People with individual policies tend to have higher deductibles and out of pocket costs vs employer based plans which could lead to over utilization.