Pension & Benefits News Average employer-sponsored coverage rose to $5,892 per employee in 2018
Wednesday, March 4, 2020

Average employer-sponsored coverage rose to $5,892 per employee in 2018

By Pension and Benefits Editorial Staff

Average employer-sponsored coverage increased to $5,892 per employee in 2018, according to the Health Care Cost Institute’s annual Health Care Cost and Utilization Report. This spending growth outpaced 2017’s growth due to continued price growth combined with an uptick in utilization.

“Prices, spending, and out-of-pocket costs continue to rise for the 160 million Americans with employer-sponsored health insurance,” said Niall Brennan, president and CEO of HCCI. “Higher prices for medical services continue to drive most spending increases, but in 2018 we also saw an uptick in utilization for the first time in several years. If these price and utilization trends continue, we expect spending growth to stay on an upward trajectory in the coming years.”

The survey, which examined 2.5 billion medical claims from approximately 160 million U.S. individuals with employer-sponsored insurance, found that rising prices were the primary driver of spending growth over the five-year study period. After adjusting for inflation, spending rose by $610 per person between 2014 and 2018. “Higher prices for medical services were responsible for about three-quarters of overall spending increases between 2014 and 2018, after inflation,” said Jean Fuglesten Biniek, senior researcher at HCCI.

While utilization changes accounted for a smaller share of spending growth after inflation, about one-fifth, most of the increase in use occurred over just one year. The increase in utilization in 2018 had a greater effect on costs than a similar increase would have had earlier in the period because of price growth between 2014 and 2017.

Out-of-pocket spending grew in each year of the five-year period. “People with job-based insurance saw their out-of-pocket costs rise 14.5 percent, or $114, between 2014 and 2018,” said John Hargraves, senior researcher at HCCI.

The report examined four groups of health care services and dozens of sub-categories. Of the four major categories, outpatient visits and procedures saw the highest 2018 spending increase (5.5 percent). In addition, increases in prices and use led to a 16 percent increase in spending from 2014 to 2018. The study also found the following:

  • Inpatient services. Per-person spending on inpatient admissions rose 11.4 percent between 2014 and 2018. Also, within each sub-category of inpatient admissions, average prices grew steadily between 2014 and 2018 while utilization trends varied. However, the 2.0 percent price increase in 2018 was lower than the near 4 percent annual increases from 2014 to 2017.
  • Professional services. Spending increased 16 percent and growth accelerated over the five-year period, driven by office visits and administered drugs. HCCI also found that psychiatry also saw strikingly high spending growth of 43 percent from 2014 to 2018, which was driven mostly by increased use.
  • Prescription drugs. The survey found that generic drugs accounted for 88 percent of all prescriptions.


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