Why the Cost of Job-Based Coverage is on the Rise
Posted by David Schneider | November 26, 2007

Look around at the healthcare system today and it is any wonder that anyone in America has health care coverage. Employers will be the first to tell you that it’s no picnic to sort through the hundreds of proposals for health care coverage that they are bombarded with. Employers want to provide the best possible job-based insurance coverage that they can, but they are finding it increasingly more difficult as job-based coverage continues to rise.

Those with job-based coverage can’t understand the reason for the rise in coverage but analysts, experts and even employers can narrow it down to three rather simple reasons for the rise in health care coverage, which not surprisingly, are all linked in some way.

Medical Costs Growing — Wages Aren’t

A driving force in the rising cost of job-based health coverage is the fact that many Americans aren’t growing financially. That simply means that salaries and wages aren’t increasing as fast as healthcare premiums are. As the standard of living increases and so does the out of pocket costs of healthcare, many families and individuals are struggling to make all ends meet with the weekly paycheck. Some families are simply struggling to get to the end of the week with what they have in their pocket while employers are struggling with whether or not they can afford to finance benefits any further, something that traditionally employers have done since the 1960’s. They (employers) are realizing that this is becoming nearly impossible as managed healthcare continues to make the switch the consumer driven healthcare.

Being Healthy Costs Less

Second to wage increases or lack thereof is the debate over leading a healthier lifestyle in order to keep job-based health coverage low. Let’s face it, Americans are growing more and more sedentary and employers have to pay for that in the form of rising premiums and benefits. With obesity becoming one of America’s top health concerns, waistlines are expanding almost as fast as the cost for job-based coverage. Employers are jumping on bandwagons to keep us healthy by offering incentive programs and wellness programs. The purpose and thought behind these programs is that if we can live healthier lifestyles, then the need to increase healthcare premiums and medical costs won’t be as great.

Treating the Healthy and Unhealthy

Finally, in the link between the cost of healthcare coverage and our lifestyle, is the cost to treat Americans, both the healthy and unhealthy. It isn’t only treatments though, as we discover more about what causes such diseases and how to prevent them, there comes the cost of all the new screening process, testing and procedures, which adds to the rising cost in job-based health coverage. As there becomes an awareness for early detection of such cancers and illnesses, doctors are making testing and screening part of an all over wellness recommendation, but the healthcare companies are not. Some testing and procedures are still not covered or covered at a small portion, which leaves the employees handling the bulk of the out of pocket expense.

Let’s not forget how different the healthcare industry is today. A couple of decades ago, employees working for small businesses or part time employees had few options for healthcare if any at all but as more and more employers look for qualified employees they also are finding that providing job-based healthcare coverage is nearly as important as having skilled employees. If you look at the picture as a whole, our lifestyle changes, the shift in employment opportunities and the healthcare crisis in general it is far easier to understand why there is a rise in job-based healthcare coverage.