Ouch: Employer health plans now cost over $20,000 per family.

How long until employers jump on the Medicare-for-All bandwagon?


According to a Kaiser Foundation survey reported in the WSJ, annual health insurance premiums rose 5% in 2019 to hit $20,576 for an employer-provided family plan.


Drilling down on the increase….


On average, employers bore 71% of that $20,000+ cost, while employees paid the rest.

Employees’ costs rose 8%, to $6,015 … translation: employees’ share of the expense is steadily increasing.

To add insult to injury, “the average employee’s deductible for single coverage, which employees pay out of their pockets before insurance kicks in, went up as well, to $1,655.”


Bottom line: ObamaCare did bend the cost curve … but in the opposite direction as was promised.

That raises a question that I haven’t heard from any politicos or pundits.


When will companies jump on the Medicare-for-All bandwagon?

First, some history…

To combat inflation (during WWII), the 1942 Stabilization Act was passed.

Designed to limit employers’ freedom to raise wages and thus to compete on the basis of pay for scarce workers…

…,  employers began to offer health benefits as incentives instead.

Suddenly, employers were in the health insurance business and employer-sponsored healthcare became the cornerstone of the entire American healthcare system. Source

At the time, health care costs were relatively modest and stable.

Then, health care costs started to increase.

Deep pocketed companies began to use full-featured health insurance plans as a recruiting tool … and unions pushed for “Cadillac” plans in their contracts.

Then, health care costs (and insurance premiums) started to skyrocket.

So now:

1. Health insurance is a major cost for all employers  offering subsidized plans.

2. With ObamaCare dictates, company plans have become essentially homogeneous.  Said differently, companies can’t substantially differentiate their insurance benefits as a recruiting tool.

3. Unlike most operating costs, health insurance insurance costs are largely non-controllable.

4. As a response, companies are are shifting an increased share of health insurance costs to employees … in the form of higher employee paid premiums and increasing deductibles.

Strikes me that it’s only a matter of time until employers consider outsourcing health insurance coverage to the government.

Think about it: offloading one of your biggest, fastest increasing and largely uncontrollable costs.

The liberal Dem candidates who are pushing MFA, may find some strange bedfellows on this one.



Follow on Twitter @KenHoma

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