Jon R. GabelSenior FellowNational Opinion Research Center at the University of Chicago

To document the state of employer-based health benefits, 2009, in the USA and California To examine changes in benefits over the last ten years in the USA and CaliforniaTo compare coverage for large and small employersTo examine the legacy health care system if health reform fails.

Telephone survey of 2,054 randomly selected public and private employers

National Research conducts interviews with employee benefit managers from Jan. 2009 to May 2009

Response rate of 47 percent in 2009 Survey conducted by HIAA 1987-1991 and

KPMG 1991-1998 Use of statistical weights Employer-based statistics Employee-based statistics

Random survey of 827 private employers with 3 or more workers

Questions often identical to national survey

Conducted from April 2009-July 2009

Survey conducted since 2000

Use of statistical weights

Sampling error of 3.4 percent with full sample.

* Estimate is statistically different from the previous year shown at p<0.05. No statistical tests were conducted for years prior to 1999.† Estimate is statistically different from the previous year shown at p<0.1. No statistical tests were conducted for years prior to 1999.Note: Data on premium increases reflect the cost of health insurance premiums for a family of four.

Source: Authors calculations from KFF/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988, 1989, 1990; Bureau of Labor Statistics, Consumer Price Index (U.S. City Average of Annual Inflation (April to April), 1988-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April), 1988-2009.

13.9%†

Health insurance premiums in California grew by 7.5% in 2009, statistically unchanged in recent years.

Premiums continue to rise at much more than the California inflation rate.

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Sources: CHCF/NORC California Employer Health Benefits Survey: 2007-2009; CHCF/HSC California Employer Health Benefits Survey: 2005-2006; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 1999-2003; California Division of Labor Statistics and Research, Consumer Price Index, California Average of Annual Inflation (April – April) 1999–2009.

* Estimates are statistically different from the previous year shown.

Source: Author’s Calculation of KFF/HRET Survey of Employer-Sponsored Health Benefits, 2001-2009; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 2001-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April), 2001-2009.

* Estimate is statistically different from All Plans estimate by coverage type (p<.05).

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2009.

HDHP/SO

HMO

PPO

POS

ALL PLANS

$3,986

$13,375

$4,878$13,470

$4,922$13,719

$4,835$13,075

$4,824

$11,083

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Source: CHCF/NORC California Employer Health Benefits Survey: 2009; Kaiser/HRET Employer Health Benefits Survey: 2009

* Estimates are statistically different between California and US.

•Premiums for most plan types in California were comparable to premiums nationally.

•California PPOs were more costly for both single and family coverage than in the rest of the nation.

Single Family

California workers have been consistently more likely to enroll in HMOs than covered workers nationally. Conversely, PPOs are more popular in the U.S. than in California.

Enrollment in high deductible plans with a savings option has changed little since 2007.

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California

U.S.

Sources: CHCF/NORC California Employer Health Benefits Survey: 2007-2009; CHCF/HSC California Employer Health Benefits Survey: 2005-2006; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2001-2003; Kaiser/HRET Employer Health Benefits Survey: 2001-2009.

Note: Conventional plan enrollment in California in 2001, 2005 and 2007 is less than 1%. Due to the addition of HDHP in 2006, no test was conducted comparing 2006 with 2005.

* Distribution is statistically different from previous year shown.

* Estimate is statistically different from the previous year shown at p<.05. No statistical tests were conducted for years prior to 1999.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009; Health Insurance Association of America (HIAA), 1988.

* Estimate is statistically different from the previous year shown at p<.05. No statistical tests were conducted for years prior to 1999.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009; Health Insurance Association of America (HIAA), 1988.

$266 $296 $340

$441 $527

$486

$719

$830

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2005 2006 2007 2008 2009

Includes plans with and without deductibles

Source: Authors calculations from Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2009.

•Estimate is statistically different from the previous year shown at p<.05.

•Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plan types, to be conservative, we concluded that workers in conventional plan types do not have a deductible of $1,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Average annual general health plan deductible for PPOs, POS plans and HDHP/SOs are for in-network services.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2009.

* Estimate is statistically different from the previous year shown at p<.05.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

# Year-to-year estimates are not significantly different at p<.05. However, there is a significant change between 2000 and 2005 for All Firms and All Small Firms at p<.05.

Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 1999–2009.

*Distributions are statistically different between All Small Firms and All Large Firms within category (p<.05).

Note: Distributions are among all firms both offering and not offering health benefits.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2009.

Tighter Managed Care Networks*

Higher Employee Cost Sharing*

Consumer-Driven Health Plans

Disease Management Programs*

Twenty-one percent of employers in California reported that they are very likely to increase the amount employees pay for health insurance premiums in the coming year.

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Source: CHCF/NORC California Employer Health Benefits Survey: 2009

Increase the Amount Employees Pay for…

Premium increases are moderate (five percent) – but six percentage points more than overall inflation.

Average deductible has roughly doubled since 2005.70 percent increase in overall

deductibles for small firms since 2007. Some indications that many small

employers in California are considering dropping coverage.

The cost of family coverage should reach $25,000 before the end of the decade.

Reasons to believe higher premium increases are in the near future: H1NI FEBHP shows 8.5 percent increase. Benefit consulting firms forecasting upturn. Seven year itch.

Urban Institute forecasts 13.2 million persons will lose employer-based insurance and the number of uninsured will rise to 57 million.