Health benefit costs rise 2.4%

The cost of providing health benefits for employers rose 2.4% nationally this year, one of the lowest increases in decades, according to an annual survey done by Mercer, a benefits-consulting company.

The increase in the Milwaukee area was even lower: 1%.

The low increase in the Milwaukee areas stems partly from employers in southeastern Wisconsin taking steps in recent years to control health care costs, said Danielle Bewer, a principal who works out of Mercer’s Milwaukee office.

The Mercer survey, which included 2,544 employers, is in line with other surveys that have shown that the cost of health insurance provided by employers is rising at a far slower pace than in the previous decade.

The average cost of family coverage through an employer has increased 20% since 2011, compared with a 31% increase from 2006 to 2011 and 63% from 2001 to 2006, according to the Kaiser Family Foundation.

Separately, a study released this week by the Commonwealth Fund found that average premiums for family coverage rose 4% from 2010 to 2015, compared with 5.7% from 2006 through 2010.

The rate of growth in total health care spending has slowed, rising at an average rate of 3.5% a year per capita from 2010 to 2015 compared with 6% from 2000 to 2010, according to the Brookings Institution.

The trends in the cost of employee health benefits conflict with the frequent contention in the political campaigns that premiums are soaring.

That holds true for health insurance sold directly to individuals and families in many markets throughout the country. About 17 million people, including those who buy insurance through marketplaces set up by the Affordable Care Act, are covered by those plans. In contrast, about 150 million people are covered by health insurance through an employer.

“The claims about the Affordable Care Act are not about the whole health care system,” said Gary Claxton, director of the health care marketplace project at the Kaiser Family Foundation.

The 2.4% increase in the cost of health insurance for employers was the lowest since 2013 and, before that, 1997.

It also was after changes in the design of health plans and increases in deductibles.

Nationally, enrollment in high-deductible health plans paired with a health savings or health reimbursement account rose to 29% of all employees this year, up from 25% in 2015, according to the Mercer survey.

The percentages are much higher in the Milwaukee area and Wisconsin.

Among the employers surveyed, 77% in the Milwaukee area and 56% in Wisconsin offer a high-deductible plan paired with a savings account, Bewer said. Among employers with 500 or more employees, 86% in Milwaukee and 74% in Wisconsin offer the plans.

Health plans with high deductibles have lower premiums. They also help make people more conscious of how they use health care dollars and are cited as one of the reasons for the slowdown in health care spending.

Deductibles have risen sharply in recent years. The trend, though, could be nearing its limits.

“Cost sharing cannot keep going up forever,” Claxton said.

Health care costs still are rising at a faster pace than inflation, Bewer said.

The slowdown in the rise in health care costs also could be coming to an end. Nationally, employers expect costs to increase by 4.1% next year. And in the Milwaukee area, employees project a 5.2% increase.