Health care affordability for California workers ... › sites › ahea.assembly.ca...Oct 27, 2020  · Health care affordability for California workers, consumers, and employers Laurel

Health care affordability for California workers, consumers, and employers

Laurel LuciaHealth Care Program DirectorUC Berkeley Labor Center

October 27, 2020

Certain health care affordability concerns more common than housing affordability concerns

69% 66%

50%44%

54% 52%46%

Unexpectedmedical bills

Your out-of-pocket costswhen usinghealth care

services

Yourprescriptiondrug costs

Your monthlyhealth

insurancepremium*

Your rent ormortgage

Gasoline orother

transportationcosts

Your monthlyutilities like

electricity orheat

Percentage of California adults ages 18-64 who were very or somewhat worried about affording health care and basic

necessities, 2019

Source: Eran Ben-Porath et al., Health Care Priorities and Experiences of California Residents: Findings from the California Health Policy Survey, California Health Care Foundation, Feb. 2020.

* Asked only of those with insurance

2

Health care affordability concerns more common among CA Hispanic, Black, and Asian adults than white adults

0%10%20%30%40%50%60%70%80%90%

100%

Unexpected medicalbills

Your out-of-pocketcosts when using

health care services

Your prescription drugcosts

Your monthly healthinsurance premium*

Percentage of California adults ages 18-64 who were very or somewhat worried about affording health care, 2019

Hispanic

Black

Asian

White

Source: Eran Ben-Porath et al., Health Care Priorities and Experiences of California Residents: Findings from the California Health Policy Survey, California Health Care Foundation, Feb. 2020.

* Asked only of those with insurance

2

3

Health care affordability concerns more common among CA adults with income at or below two times poverty level

0%10%20%30%40%50%60%70%80%90%

100%

Unexpectedmedical bills

Your out-of-pocketcosts when using

health care services

Your prescriptiondrug costs

Your monthlyhealth insurance

premium*

Percentage of California adults ages 18-64 who were very or somewhat worried about affording health care, 2019

Affordability concerns hinder access to care for half of California adults

51%

38%

16%

25%

21%

18%

12%

Experienced any of the affordability problems

Skipped dental care or checkups

Put off or postponed getting mental health care

Put off or postponed getting physical health care

Skipped a recommended medical test or treatment

Not filled a prescription for a medicine

Cut pills in half or skipped doses of medicine

Percentage of California adults ages 18-64 who had problems affording care due to cost, 2019

Source: Eran Ben-Porath et al., Health Care Priorities and Experiences of California Residents: Findings from the California Health Policy Survey, California Health Care Foundation, Feb. 2020. 5

• Pie chart with coverage types

6

JOB-BASED COVERAGE

California employers and workers spent $144 billion on health care in 2019

Spending on covered benefits for job-based coverage, California, 2019 ($ billions)

Sources: Healthy California for All Virtual Commission Meeting Presentation, August 13, 2020.CalPERS Facts at a Glance for Fiscal Year 2018-19.

$17 billion in deductibles, copayments and other cost sharing

$27 billion in worker premiums

$100 billion in employer premiums

includes nearly $5 billion for state employees via CalPERS

8

California premiums for family coverage exceeded $20,000 in 2018

Single Coverage Family Coverage Minimum Wage*

Average premiums for job-based coverage in California, 2018, shown as hourly equivalents for a full-time worker

$8,712 premium is equivalent to

$20,843 premium is

equivalent to $13/hour

$10/hour

$4/hour

* California minimum wage for employers with 26 employees or more as of January 1, 2020

Source: UC Berkeley Labor Center analysis of average premiums from California Health Care Foundation, California Employer Health Benefits Survey, August 2019. 9

Premiums have grown substantially while typical wages have not budged

10

Share of Californians with job-based coverage relatively flat over time

11

Worker and employer contributions have both increased, but split remained relatively flat

27% 27%25% 26%

33%

26%29%

26% 27% 27%

12%15%

13%16%

22%

17% 17% 16% 17%14%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Worker share of premium, 2009-2018

Family coverage

Single coverage

Source: California Health Care Foundation, California Employer Health Benefits Survey, Aug. 2019.12

Rising health care costs reduce wages

Example:• National RAND study found that hospital mergers lead

to a $521 increase in hospital prices over the 2010 to 2016 period, a $579 increase in hospital spending among the privately insured population and a similar, $638 reduction in wages.

Source: Daniel Arnold and Christopher M. Whaley, Who Pays for Health Care Costs? The Effects of Health Care Prices on Wages, RAND Working Paper, July 2020. 13

Share of Californians with deductibles and deductible amounts have grown

14

Overturning ACA would make health care more unaffordable for those with job-based coverage

ACA protections and expansions include:• Certain preventive services with no cost sharing• Ban on capping annual/ lifetime benefits• Annual out-of-pocket limit• Dependent coverage for young adults under age 26• For those who lose job-based coverage:

– Protection against being denied coverage or charged higher premiums based on pre-existing conditions

– Medi-Cal expansion with no premiums or subsidized insurance through Covered California

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INDIVIDUAL MARKET/ COVERED CALIFORNIA

Cost growth affects unsubsidized premiums but not premiums paid by subsidized enrollees

In June 2020:• 1.35 million with insurance through Covered California

with ACA and/or state premium subsidies – Average premium: $582 per month – Net premium after ACA/ state subsidies: $127 per month– Largely protected from market’s premium growth trends based

on how the ACA/state premium subsidies were structured• 970,000 Californians without subsidies

– Average premium for unsubsidized enrollees in Covered California: $461 per month

– Average of 6.3% annual premium growth 2015-2021, compared to 1.5% average inflation

Sources: Covered California Active Member Profile, Jun. 2020. Covered California, California’s Efforts to Build on the ACA Lead to a Record-Low Rate Change for the Second Consecutive Year, Aug. 4, 2020. Katherine Wilson and Laurel Lucia, Hanging On to Coverage? CHCF, Oct. 2, 2020. 17

Out-of-pocket costs for all individual market enrollees are affected by cost growth

Sources: Covered California 2014-2021 Standard Benefit Plan Designs. California Department of Finance, Consumer Price Index.

$6,350 $6,250 $6,250$6,800 $7,000

$7,550 $7,800$8,200

$2,000 $2,000 $2,250$2,500 $2,500 $2,500

$4,000 $4,000

2014 2015 2016 2017 2018 2019 2020 2021

Covered California Silver 70 Plan Individual Maximum Out of Pocket and Deductible, 2014-2021

29%

100%

Federal Poverty Level: 11% (proj.)CA inflation: 18% (proj.)

Cumulative growth, 2014-2021

Maximum Out of Pocket

Medical Deductible

18

Many individual market enrollees report difficulty affording premium and out-of-pocket costs

12% 11% 11%

27% 30% 27%

< 250% FPL 250-400%FPL

400%+ FPL

Premiums

California individual market enrollees reporting some or a lot of difficulty paying health care costs in 2017

Source: Fung V, Liang C, Hsu C, Health Insurance and Health care Affordability Perceptions Among Individual Insurance Market Enrollees in California in 2017, California Health Care Foundation, May 2018.

10% 7% 6%

23% 26%22%

< 250% FPL 250-400%FPL

400%+ FPL

Out-of-pocket costs

Some difficulty

A lot of difficulty

39% 41% 38%33% 33%

28%

19

Contact

Laurel Lucia, Health Care Program Director, UC Berkeley Labor Center, [email protected]

https://laborcenter.berkeley.edu/

https://laborcenter.berkeley.edu/rising-health-care-costs-in-california-a-worker-issue/

Follow: @UCBLaborCenter

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mailto:[email protected]://laborcenter.berkeley.edu/https://laborcenter.berkeley.edu/rising-health-care-costs-in-california-a-worker-issue/

Health care affordability for California workers, consumers, and employersCertain health care affordability concerns more common than housing affordability concernsHealth care affordability concerns more common among CA Hispanic, Black, and Asian adults than white adultsHealth care affordability concerns more common among CA adults with income at or below two times poverty levelAffordability concerns hinder access to care for half of California adultsSlide Number 6Job-Based CoverageCalifornia employers and workers spent $144 billion on health care in 2019California premiums for family coverage exceeded $20,000 in 2018Premiums have grown substantially while typical wages have not budgedShare of Californians with job-based coverage relatively flat over timeWorker and employer contributions have both increased, but split remained relatively flatRising health care costs reduce wagesShare of Californians with deductibles and deductible amounts have grownOverturning ACA would make health care more unaffordable for those with job-based coverageIndividual Market/ �Covered CaliforniaCost growth affects unsubsidized premiums but not premiums paid by subsidized enrolleesOut-of-pocket costs for all individual market enrollees are affected by cost growthMany individual market enrollees report difficulty affording premium and out-of-pocket costsContact