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 CaliforniaTo 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 employersNational Research conducts interviews with employee benefit managers from Jan. 2009 to May 2009Response rate of 47 percent in 2009Survey conducted by HIAA 1987-1991 and KPMG 1991-1998Use of statistical weightsEmployer-based statisticsEmployee-based statistics

Random survey of 827 private employers with 3 or more workersQuestions often identical to national surveyConducted from April 2009‐July 2009

Survey conducted since 2000Use of statistical weightsSampling 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. 

6

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

9

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.428 395

508

392 372

1,1271,087

1,2481,106

872

402 406 410 403332

1,1151,123 1,143

1,090

924

0

200

400

600

800

1,000

1,200

1,400 California U.S.

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.

10

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. 

Single

Family

• In 2009, 30 percent of covered California employees worked for firms that paid the full premium for single coverage.

• Employees of small firms were significantly more likely to pay a very large share of the family premium (over 50 percent) than were workers in large firms.

* Distribution is statistically different from All Firms.

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

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California workers contributed an average of $564 annually for single coverage and $3,398 for family coverage in 2009.  They contributed significantly less for single coverage than did workers nationally.

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

$5,133 *

$13,525

$4,824 *

$13,375

* Estimates are statistically different between California and U.S. within coverage type.

$266 $296 $340

$441 $527 $486

$719

$830

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900

2005 2006 2007 2008 2009Includes 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.

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PPO members were much more likely to have an annual deductible than workers in HMOs or POS plans.  

Deductibles averaged $430 for PPO single coverage in California, where 77 percent of covered workers have them, versus $634 in the nation.

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

* Percentages are significantly different between California and U.S.

^ Estimated Deductibles are significantly different between California and U.S.

$430

$987

$1887 $1838

$634

$1061

$854$699

13

51

62 62

44

17

52

6670

49

10*

50

7179

52

10

50

78 80

54

13

53

78 82

54

13

53

77

89

55

12

53

76

86

55

12%

47%

76%

89%

55%

15%

48%

80%88%

57%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All Small Firms (3-199 Workers)

MidSize Firms (200-999 Workers)

Large Firms (1,000-4,999 Workers)

Jumbo Firms (5,000 or More Workers)

All Firms

1999 2001 2003 2004 2005 2006 2007 2008 2009

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

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

Covered Workers Facing Prescription Drug Copayment Amounts, Average Copayments, 2000-2009

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

^ Fourth-tier copayment information was not obtained prior to 2004.

Note: Average copayments for generic, preferred and nonpreferred drugs are calculated by combining the weighted average copayments for those types of drugs among firms with a single copayment amount or a multi-tier cost sharing structure. The average copayment for fourth-tier drugs is calculated using information from only those plans that have a fourth-tier copayment amount.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2000-2009.

^ ^ ^ ^

• Copayments for office visits increased substantially for all types of plans from 2004 to 2009.

* Distribution is statistically different from previous year shown.

Source: CHCF/NORC California Employer Health Benefits Survey: 2007-2009; CHCF/HSC California Employer Health Benefits Survey: 2005-2006.

13%

38%

25%

40%

13%

38%

0%

10%

20%

30%

40%

50%

Firm asks employees to complete a health risk appraisal *

Of these Firms, Share Offering a financial incentive to complete a health risk 

appraisal

All small firms (3‐199 workers)

All large firms (200+ workers)

All firms

• Thirteen percent of California firms ask workers to complete a health risk appraisal or assessment, with large firms being significantly more likely to do so.

* Estimate is statistically different between All Small Firms and All Large Firms.

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

*Tests found no statistical differences from estimate for the previous year shown (p<.05).

Note: Estimates presented in this exhibit are based on the sample of both firms that completed the entire survey and those that answered just one question about whether they offer health benefits.

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.

• Forty percent of all California firms offered a high deductible plan in 2009.

• Two percent of firms offered an HDHP with an HRA, while 14 percent offered an HSA-eligible HDHP.

* Tests found no statistically different estimates between small firms and large firms.1 Defined as having a deductible of at least $1000 for single coverage, and at least $2000 for family coverage.

Sources: CHCF/NORC California Employer Health Benefits Survey: 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*

35%

28%

14%

12%

17%

15%

4%

16%

50%

43%

47%

46%

52%

53%

42%

39%

9%

12%

26%

18%

19%

13%

35%

19%

4%

13%

12%

19%

8%

12%

17%

15%

2%

4%

2%

5%

4%

7%

2%

11%

0% 20% 40% 60% 80% 100%

All Large Firms

All Small Firms

All Large Firms

All Small Firms

All Large Firms

All Small Firms

All Large Firms

All Small Firms

Very Effective Somewhat Effective Not Too Effective Not At All Effective Don't Know

Higher Employee Cost Sharing*

Consumer‐Driven Health Plans

Disease Management Programs*

Disease Management ‐‐ “Evidence about cost‐reduction in the private sector have been inconclusive, and programs in the Medicare population have not shown cost reductions either.”Comparative Effectiveness – “It would take several years before new research on comparative effectiveness would reduce health care spending substantially.”Preventive Services – (Quoting study by Tufts) “Only 20 percent of preventive services that have been accessed yielded savings.”Malpractice – “CBO has not found consistent evidence that changes in the malpractice environment would have a measurable impact on health care spending.”

Did a Severe Injury Occur

Was the Injury Due to Negligence

Percent of Medical Encounters

Thousand of Malpractice Claims Filed

%of Encounters Resulting in a Malpractice Claim

No NA 98.6% 11 .003

Yes No 0,9% 15 4.26

Yes Yes 0.5% 30 16.77

All Sometimes 100% 57 .15

Source: D.M. Stoddart, Health Affairs, 2007

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.

28

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

Increase the Amount Employees Pay for…

9%

2%

6%

5%

12%

14%

12%

21%

12%

8%

3%

3%

20%

15%

15%

16%

19%

23%

5%

9%

17%

29%

30%

16%

59%

59%

85%

83%

49%

38%

38%

46%

1%

4%

3%

4%

4%

1%

0% 20% 40% 60% 80% 100%

Offer High Deductible with HSA

Offer High Deductible with HRA

Drop Coverage Entirely

Restrict Employee Eligibility for Coverage

Deductibles

Prescription Drugs

Coinsurance or Copays

Premiums

Very Likely Somewhat Likely Not Too Likely Not At All Likely Don't Know

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:

H1N1FEBHP shows 8.5 percent increase.Benefit consulting firms forecasting upturn.Seven year itch.Reports from the small group market in some states indicate dramatic increases.

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

31

“If I didn’t have health insurance, I would never have made an appointment with my doctor because of the cost. The cancer would have spread and I would not be alive today to tell you my story.”  ‐ Jaclyn Michalos, 27