Survey: Workers Feel the Pinch January 2014
Introduction Employer-based coverage is the leading source of health insurance in California as well as nationally. This edition of the annual Survey provides an overview of the landscape in the lead-up to implementation of the Affordable Care Act (ACA) in 2014. Overall, the findings suggest that, compared with recent years, California workers are less likely to be offered employerbased coverage, and those who are covered pay more in premiums and cost sharing. Workers may continue to see costs rise next year: Over 40% of surveyed firms said they are likely to increase what workers pay for their premiums in the coming year, and 34% plan to increase employees deductibles. Nevertheless, because this survey was conducted during the immediate lead-up to ACA implementation, the 2013 numbers may not signal important trends. Key findings include: The proportion of California employers offering coverage has declined significantly over the last decade, from 69% in 2000 to 61% in 2013. Coverage is offered to employees at a higher rate at larger firms, firms with higher wages, and firms with some union workers. Since 2002, premiums in California rose by 185%, more than five times the state s overall inflation rate. Average monthly premiums for single coverage in California were $572 in 2013, compared to $490 nationally. For family coverage, monthly premiums were $1,442 in California and $1,363 nationally. California workers paid an average of 2 of the total premium for single coverage and 33% for family coverage in 2013, significantly higher shares than the previous year. contents Overview... 3 Coverage Availability... 4 Cost of Health Insurance... 9 Benefits and Cost Sharing... 18 Plan Choice and Enrollment... 29 Changes... 33 Cost Containment... 36 Assessments and Incentives... 37 Tax Credit... 40 Methodology... 41 California s HMO premiums have been higher than the national average since 2010 a change from the previous decade. Nearly one-third of covered workers in small firms had a deductible of $1,000 or more for single coverage in 2013, up from just 7% in 2006. In large firms, only 9% had a deductible of $1,000 or more. One in four California firms reported that they reduced benefits or increased cost sharing in the last year. 2014 California HealthCare Foundation 2
Employers, Workers, and Covered Workers, by Firm Size California vs. United States, 2013 Overview California firms with fewer than number of workers 3 to 9 10 to 49 50 to 199 200 to 999 1,000+ 50 workers accounted for 9 Employers* 1% of all employers, but just 27% of California 61% 31% 6% all workers and 2 of covered US 61% 3 6% <1% 1,000+ workers. California Workers 9% 18% 14% 1 46% 1% US 8% 17% 14% 13% 48% California Covered Workers 7% 15% 13% 1 53% US 4% 15% 14% 15% 53% *Estimates are statistically different between California and US. Note: Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2013; author analyses of data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits public use file: 2013. 2014 California HealthCare Foundation 3
Employers Offering Coverage California vs. United States, 2000 to 2013 100% 90% Coverage Availability A shrinking proportion of California employers offer health coverage to their workers. Since 2009, the offer 80% 70% 60% 50% 69% 68% 70% 68% 71% 66% 70% 66% 67% 63% 67% 60% 71% 61% 71% 59% 70% 63% 73% 59% 69%* 69% 63%* 60% 61% 60% 61% 57% rate has declined significantly, from 73% to 61%. The 2013 California offer rate is similar to that of the nation as a whole. 40% 30% California United States 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 *Estimate is statistically different from the previous year shown. Sources: CHCF/NORC Survey: 2007 2013; CHCF/HSC Survey: 2005 2006; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: 2000 2003; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2000 2013. 2014 California HealthCare Foundation 4
Employers Offering Coverage, by Firm Characteristics California, 2013 All Firms 61% Lower-Wage Firms* Higher-Wage Firms* 2 71% Coverage Availability Offer rates varied widely by firm characteristics. As firm size increases, so does the offer rate. Only 2 of lower-wage firms Many Part-Time Workers* 40% offered health benefits in 2013, Fewer Part-Time Workers* 68% versus 71% of higher-wage firms. At Least Some Union Workers* No Union Workers* 3 to 9 Workers* 10 to 49 Workers* 50 to 199 Workers* 49% 58% 76% 91% 100% Employers with at least some union workers were significantly more likely to offer coverage than those with no union members on staff. 200 to 999 Workers* 98% 1,000+ Workers* 100% *Estimate is statistically different from all other firms. Definitions: Lower-wage firms are firms with 35% or more of workers earning $23,000 or less per year. Higher-wage firms are firms with less than 35% of workers earning that amount. Many part-time workers is defined as 35% or more of the workforce working part time. Fewer part-time workers is the inverse. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 5
Employers Offering Health Benefits, by Firm Size California vs. United States, 2013 Coverage Availability Slightly less than half of California s California United States 91% 91% 98% 98% 100% 100% smallest firms (3 to 9 workers) provided coverage in 2013, while the vast majority of larger firms 76% 73% did so. Offer rates for California firms were comparable to 61% 57% 49% nationwide rates. 45% All Firm Sizes 3 to 9 10 to 49 50 to 199 200 to 999 1,000+ Number of Workers Note: Tests found no statistically different estimates between California and US. Sources: CHCF/NORC Survey: 2013; author analyses of data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits public use file: 2013. 2014 California HealthCare Foundation 6
Employee Eligibility, Take-Up Rates, and Coverage California vs. United States, 2013 Coverage Availability Seventy-nine percent of California California United States workers in firms that offered coverage were eligible for health 79% 77% 86% 80% benefits, and 86% of those elected to enroll. Overall, 68% of employees 68% 6 received coverage from their firm in 2013. Employees Who Are Eligible Eligible Employees Who Take Up Coverage* Employees Covered* *Estimates are statistically different between California and US. Sources: CHCF/NORC Survey: 2013; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2013. 2014 California HealthCare Foundation 7
Worker Coverage Rates Among Firms Offering Health Benefits by Firm Size, 2003 to 2013, Selected Years All Firms 69% 65% 66% 65% 67% 68% 2003 2005 2007 2009 2011 2013 Coverage Availability Insurance coverage rates among California employers offering health benefits have been fairly stable since 2003. Small Firms (3 to 199 workers) Large Firms (200+ workers) 73% 73% 71% 67% 66% 67% 66% 60% 63% 64% 67% 69% Note: Tests found no statistically different estimates from previous year shown within firm size. Sources: CHCF/NORC Survey: 2007, 2009, 2011, 2013; CHCF/HSC Survey: 2005; Kaiser/HRET California Employer Health Benefits Survey: 2003. 2014 California HealthCare Foundation 8
Average Increases in Premiums, Family Coverage by Product Enrollment Status, California vs. United States, 2013 Cost of Health Insurance Among California firms that offered the same health plan or plans in 5.7% 2012 and 2013 (fixed enrollment), the average family coverage premium increase for those plans 4.0% 4.0% was 5.7%. When the calculation includes California firms that changed plans or had workers who switched plans (variable enrollment), the average family premium increase was 4.0%. California (Fixed Enrollment) California (Variable Enrollment) United States (Variable Enrollment) Sources: CHCF/NORC Survey: 2013; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2013. 2014 California HealthCare Foundation 9
Premium Increases Compared to Inflation Family Coverage, California, 1999 to 2013 Cost of Health Insurance Premiums for family coverage in 18% 16% 14% 1 10% 8% 6% 4% 0% 4.8% 6.7% 3.5% 1999 10.0%* 2.8% 2000 13.4%* 2001 2002 15.8%* 4.3% 2.8% 2.7% 2003 1.7% 2004 11.4%* 3.9% 8.* 2005 8.7% 8.3% 8.3% 4. 2006 2007 2008 7.5% 2009 8.1% 8.1% 3.4% 3.0% 3.1% 0.6% 2010 1.8% Premiums Overall Inflation 2011 1.7% 2012 6.4%* 5.7% 1.4% 2013 California grew by 5.7% in 2013, a second consecutive year of decline in the rate of growth. However, premiums continued to rise much faster than the California inflation rate. *Estimates are statistically different from the previous year shown. Sources: CHCF/NORC Survey: 2007 2013; CHCF/HSC Survey: 2005 2006; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: 1999 2003; California Division of Labor Statistics and Research, Consumer Price Index, California Average of Annual Inflation (April to April) 1999 2013. 2014 California HealthCare Foundation 10
Cumulative Premium Increases Compared to Inflation Family Coverage, California, 2002 to 2013 Cost of Health Insurance Since 2002, premiums for family 200% 180% 160% Premiums Overall Inflation 185.0% coverage in California have increased by 185%, more than five times the 33% increase 140% in the state s inflation rate. 120% 100% 80% 60% 40% 13.4% 33.3% 20% 2.8% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: CHCF/NORC Survey: 2007 2013; CHCF/HSC Survey: 2005 2006; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: 2002 2003; California Division of Labor Statistics and Research, Consumer Price Index, California Average of Annual Inflation (April to April) 2002 2013. 2014 California HealthCare Foundation 11
Average Monthly Premiums, by Plan Type California vs. United States, 2013 Cost of Health Insurance Average monthly premiums for All Plans* HMO PPO* POS HDHP/SO Single Coverage $572 $490 $555 $502 $613 $503 $585 $498 $482 $442 California United States single coverage were significantly greater in California than nationally. High-deductible health plans with a savings option had the lowest average monthly premium. All Plans HMO PPO POS HDHP/SO Family Coverage $1,442 $1,363 $1,439 $1,379 $1,501 $1,389 $1,370 $1,369 $1,286 $1,269 *Estimates are statistically different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: CHCF/NORC Survey: 2013; Kaiser/HRET Employer Health Benefits Survey: 2013. 2014 California HealthCare Foundation 12
Average Monthly HMO Premiums, Single Coverage California vs. United States, 2000 to 2013 Cost of Health Insurance In a change from the previous $600 $500 $400 $300 $200 $187 $163 $199 $178 $233 $196 California United States $263 $222 $288 $261 $314 $282 $342 $337 $358 $330 $396 $374 $406 $395 $428 $474 $422 $446 $520 $472 $555 $502 decade, California s HMO premiums have been higher than the national average since 2010. $100 2000* 2001* 2002* 2003* 2004* 2005* 2006 2007* 2008* 2009 2010 2011* 2012* 2013 *Estimates are statistically different between California and US. Notes: Annual rate of change for HMO single premiums should not be calculated by comparing premiums from one year to the next, due to both the survey s sampling design and the way in which plan information is collected. Rates of change in family premiums are collected directly as a question in the survey (no change data for single premiums are collected). Sources: CHCF/NORC Survey: 2007 2013; CHCF/HSC Survey: 2005 2006; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: 2000 2003; Kaiser/HRET Employer Health Benefits Survey: 2000 2013. 2014 California HealthCare Foundation 13
Annual Worker and Employer Premium Contributions California vs. United States, 2013 Cost of Health Insurance Annual premiums are higher in Worker Contribution Employer Contribution California than nationally for single California US California US Single Coverage $1,450* $5,410 $6,859* $999* $4,885 $5,884* Family Coverage $5,252 $12,055 $17,307 $4,565 $11,786 $16,351 coverage, and California employees contribute more toward premiums. In 2013, workers in the state contributed an average of $1,450 toward the premium for single coverage and $5,252 for family coverage. The corresponding national figures were $999 for single coverage and $4,565 for family coverage. *Estimates are statistically different between California and US within coverage type. Note: Segments may not add to total contribution due to rounding. Sources: CHCF/NORC Survey: 2013; Kaiser/HRET Employer Health Benefits Survey: 2013. 2014 California HealthCare Foundation 14
Premiums Relative to the Average Annual Premium Single and Family Coverage, California, 2013 Cost of Health Insurance Nearly two-thirds of California s Percentage of Average 120% + 110% to 119% 100% to 109% 90% to 99% 80% to 89% < 80% $6,859 13% 10% 1 ABOVE AVERAGE 16% 18% covered workers were in firms that paid less than the average annual premium of $6,859 for single coverage. In contrast, 13% were in firms paying premiums greater 19% 17% than 120% of the average. $17,307 18% BELOW AVERAGE 15% 10% 28% 24% Single Coverage Family Coverage Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 15
Worker Share of Premium, by Firm Size California, 2013 No Contribution >0% to 25% >25% to 50% >50% Cost of Health Insurance In 2013, 18% of California s covered employees were in firms that All Firms Small Firms (3 to 199 workers) Large Firms (200+ workers) All Firms Single Coverage 18% 49% 26% 7% 18% 47% 25% 11% 18% 50% 27% 5% Family Coverage 5% 41% 34% 20% paid the full premium for single coverage. Employees of small firms were much more likely to pay more than half of the premium for family coverage than employees of large firms. Small Firms* (3 to 199 workers) 2 38% 38% Large Firms* (200+ workers) 6% 5 3 10% *Difference is statistically different between small and large firms for family coverage. Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 16
Worker Share of Premium, Single and Family Coverage California, 2009 to 2013 Cost of Health Insurance California workers paid an average Single Coverage 1 15% 13% 16% 2* 2009 2010 2011 2012 2013 of 2 of the total premium for single coverage and 33% for family coverage in 2013. Their annual premium contributions were $1,450 and $5,252, respectively (not shown). Family Coverage 27% 27% 25% 26% 33%* *Estimates are significantly different from previous year shown. Source: CHCF/NORC Survey: 2009 2013. 2014 California HealthCare Foundation 17
Workers with Specified Office Visit Copayments, by Plan Type California, 2009 to 2013, Selected Years per visit copay 2009 2011* 2013 HMO $5 $10 $15 $20 $25 $30 Other 7% 20% 35% 2 8% 6% 1% 1% 24% 27% 25% 9% 8% 5% 11% 15% 48% 10% 10% 5% Benefits and Cost Sharing Copayments for office visits increased substantially for all types of plans from 2009 to 2013, with $20 the most common amount across all plan types. 2009 2011* 2013 2009 2011* 2013 PPO 1% <1% 16% 29% 28% 1 6% 7% 10% 24% 31% 16% 11% 6% 4% 1 36% 19% 1 17% POS 3% 20% 23% 35% 5% 4% 9% <1% 7% 6% 33% 9% 27% 19% 23% 37% 17% 14% 8% *Distribution is statistically different from previous year shown. Notes: POS means point-of-service plan. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2009, 2011, 2013. 2014 California HealthCare Foundation 18
Workers with Annual Deductible, Single Coverage by Plan Type, California vs. United States, 2013 Benefits and Cost Sharing Workers with single coverage California United States $2,193 $2,003 100% 100% enrolled in HMOs were less likely to have a deductible in California $799 than in the nation as a whole. The $871 $1,314 66% $1,055 7 81% prevalence for other plan types was comparable in 2013. $729 51% 41% $922 9% HMO* POS In-Network PPO In-Network HDHP/SO *Percentages are significantly different between California and US. Average deductibles are significantly different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Sources: CHCF/NORC Survey: 2013; Kaiser/HRET Employer Health Benefits Survey: 2013. 2014 California HealthCare Foundation 19
Workers with a Large Deductible ($1,000+), Single Coverage by Firm Size, California, 2006 to 2013 Benefits and Cost Sharing Annual deductibles of $1,000 or 35% more for single coverage have 30% All Firms Small Firms (3 to 199 workers) Large Firms (200+ workers) 27% 27% 26% 3 become more common in firms with 3 to 199 workers. The percent 25% has more than doubled since 2008. 21%* 20% 15% 14% 1 14% 13% 14% 17% 10% 5% 7% 6% 5% 11% 10% 10% 9% 5% 6% 5% 5% 8% 9% 0% 2006 2007 2008 2009 2010 2011 2012 2013 *Estimate is statistically different from previous year shown within firm size. Sources: CHCF/NORC Survey: 2007 2013; CHCF/HSC Survey: 2006. 2014 California HealthCare Foundation 20
Deductibles for Single Coverage, by Plan Type California, 2013 <$500 $500 to $999 $1,000 to $1,999 $2,000+ Benefits and Cost Sharing Among California workers with a deductible for single coverage, All Plans HMO 38% 18% 19% 25% 5 18% 13% 17% 38% had an annual deductible of less than $500, while 44% had a deductible of $1,000 or more. PPO 45% 24% 14% 17% POS 28% 25% 38% 8% HDHP/SO* 31% 69% *Distribution is statistically different from All Plans. Notes: The data are based on workers with a deductible. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 21
Deductibles for Single PPO Coverage California vs. United States, 2003 to 2013, Selected Years Benefits and Cost Sharing Since 2003, California workers have <$500 $500 to $999 $1,000 to $1,999 $2,000+ experienced significant increases 2003 2007* 2009 California 71% 17% 6% 6% 7 21% 5% 65% 26% 7% in deductibles for PPO coverage. In 2013, a majority of workers face deductibles of $500 or more. 2011 58% 3 6% 4% 2013* 45% 24% 14% 17% 2003 69% 20% 9% 2007* 2009* 2011 2013* United States 64% 24% 10% 48% 3 14% 6% 47% 3 14% 7% 39% 35% 17% 9% *Distribution is statistically different from previous year shown. Note: Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2007, 2009, 2011, 2013; Kaiser/HRET Survey: 2003; author analyses of data from the Kaiser/HRET Employer Health Benefits Survey public use file: 2003, 2007, 2009, 2011, 2013. 2014 California HealthCare Foundation 22
Deductibles for Family Coverage, by Plan Type California, 2013 <$500 $500 to $999 $1,000 to $1,999 $2,000+ Benefits and Cost Sharing Among California workers with an aggregate family deductible, 34% All Plans HMO 7% 27% 14% 5 2 18% 9% 51% had a deductible of less than $1,000 for family coverage, while 5 faced an annual family deductible of $2,000 or more. PPO 9% 37% 24% 30% POS 17% 18% 27% 37% HDHP/SO* 98% *Distribution is statistically different from All Plans. Notes: The data are based on workers with a deductible. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $2,000 for family coverage. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 23
Annual Out-of-Pocket Limits, Single Coverage, by Plan Type California, 2013 <$1,000 $1,000 to $1,499 $1,500 to $1,999 $2,000 to $2,499 $2,500 to $2,999 $3,000+ No Limit Benefits and Cost Sharing The large majority of covered workers (89%) with single coverage had an annual out-of-pocket limit. All Plans HMO PPO* POS HDHP/SO* 1% 10% 34% 8% 8% 27% 11% 9% 5 6% 14% 15% 1% 3% 3% 13% 6% 15% 15% 40% 9% 7% 29% 21% 28% 13% 1% 1% 5% 11% 77% 3% 1% 1% For 27% of workers, the limit was $3,000 or more. Among workers in a highdeductible health plan with a savings option (HDHP/SO), more than three-fourths had a limit of $3,000 or more. *Distribution is statistically different from All Plans. Notes: Since HMOs typically provide very comprehensive coverage, not having a limit on out-of-pocket expenditures does not expose enrollees to the same financial risk as it could in other plan types. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 24
Annual Out-of-Pocket Limits, Single PPO Coverage California, 2005 to 2013, Selected Years <$1,000 $1,000 to $1,499 $1,500 to $1,999 $2,000 to $2,499 $2,500 to $2,999 $3,000+ No Limit Benefits and Cost Sharing Only 16% of California workers in PPOs had an out-of-pocket limit of less than $1,500 in 2013, compared 2005 2007* 18% 16% 10% 18% 10% 19% 9% 1 1 15% 16% 13% 18% 14% to 34% in 2005. Limits of $3,000 or more increased from 29% in 2011 to 40% in 2013. 2009* 8% 18% 10% 20% 10% 2 13% 2011* 5% 13% 15% 13% 9% 29% 15% 2013 3% 13% 6% 15% 15% 40% 9% *Distribution is statistically different from previous year shown. Note: Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2007, 2009, 2011, 2013; CHCF/HSC Survey: 2005. 2014 California HealthCare Foundation 25
Annual Out-of-Pocket Limits, Family Coverage, by Plan Type California, 2013 <$2,000 $2,000 to $2,999 $3,000 to $3,999 $4,000 to $4,999 $5,000 to $5,999 $6,000+ No Limit Benefits and Cost Sharing Only 24% of covered workers in California with an aggregate outof-pocket limit for family coverage All Plans HMO PPO 24% 6% 27% 6% 6% 20% 11% 25% 5% 37% 4% 13% 15% 35% 10% 4% 7% 11% 24% 9% had an annual limit under $2,000. Twenty percent had a limit of $6,000 or more. POS HDHP/SO* 9% 8% 21% 25% 21% 14% 5% 16% 70% 3% 3% 1% 1% *Distribution is statistically different from All Plans. Notes: Since HMOs typically provide very comprehensive coverage, not having a limit on out-of-pocket expenditures does not expose enrollees to the same financial risk as it could in other plan types. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $2,000 for family coverage. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 26
Workers Cost Sharing for Prescriptions California vs. United States, 2005 to 2013, Selected Years Benefits and Cost Sharing In 2013, 66% of covered California One Tier Two Tier Three Tier Four Tier Other workers had a three- or four- 2005 2007* 2009 2011* 2013 California 13% 41% 44% 11% 33% 54% 9% 30% 55% 8% 27% 61% 9% 2 59% 7% 1% 1% 4% 3% 1% 3% tier cost-sharing formula for prescription drugs. Nationally, 8 of covered workers were subject to three- or four-tier formulas. 2005 8% 15% 70% 6% 16% 68% 7% 5% 1 67% 11% 7% 11% 63% 14% 5% 10% 59% 23% 2007* 2009* 2011* 2013* United States 4% 4% 3% 4% 4% *Distribution is statistically different from previous year shown. Definitions: One tier is the same cost share regardless of drug type. Two tier is one payment for generic drugs and one for name brand. Three tier is one payment for generic drugs, another for preferred drugs, and a third for non-preferred drugs. Four tier is three-tier cost sharing plus a fourth tier for lifestyle or other specified drugs. Other includes no cost sharing. Note: Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2007, 2009, 2011, 2013; CHCF/HSC Survey: 2005; author analysis of data from the Kaiser/HRET Survey of Employer-Sponsored Health Benefits public use file: 2005, 2007, 2009, 2011, 2013. 2014 California HealthCare Foundation 27
Average Prescription Copayments, by Drug Type California, 2003 to 2013, Selected Years Generic Drugs $8.95 $10.11* $10.89* $10.00 $9.96 $10.04 2003 2005 2007 2009 2011 2013 Benefits and Cost Sharing In 2013, average copayments for generic drugs were less than half what they were for preferred drugs, and about one-fourth what they were for nonpreferred drugs. Preferred Drugs $18.61 $21.93* $21.86 $22.40 $24.35 $25.47 Nonpreferred Drugs $32.58 $38.41* $39.47 $39.20 $43.50* $41.85 *Estimate is statistically different from previous year shown. Sources: CHCF/NORC Survey: 2007, 2009, 2011, 2013; CHCF/HSC Survey: 2005; Kaiser/HRET California Employer Health Benefits Survey: 2003. 2014 California HealthCare Foundation 28
Worker Health Plan Options, by Type California vs. United States, 2013 Plan Choice and Enrollment Over three-fourths of covered California United States California workers had an HMO 75% 76% 77% option in 2013, compared to only one-third of covered workers nationally. 43% 34% 20% 23% <1% 4% 13% Conventional* POS HDHP/SO PPO HMO* *Estimates are statistically different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Source: CHCF/NORC Survey: 2013; Kaiser/HRET Employer Health Benefits Survey: 2013. 2014 California HealthCare Foundation 29
Firms Offering a High-Deductible Health Plan, by Firm Size California, 2013 All Firms Small Firms Large Firms (3 to 199 workers) (200+ workers) Plan Choice and Enrollment Sixty-two percent of all California firms offered a high-deductible plan in 2013. Of these firms, 21% 6 6 offered a high-deductible plan with 54% 49% an HRA, while 40% offered a highdeductible plan with an HSA. 40% 40% 21% 21% 14% HDHP HDHP with HRA HDHP with HSA Notes: HDHP means high-deductible health plan, HRA means health reimbursement arrangement, and HSA means health savings account. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Tests found no statistically different estimates between small firms and large firms. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 30
Enrollment of Covered Workers, by Plan Type California vs. United States, 2003 to 2013, Selected Years Plan Choice and Enrollment California workers have been Conventional HMO PPO POS HDHP/SO consistently more likely to enroll 2003 2005* 2007* 2009 2011* 2013 California 1% 5 29% 17% 49% 34% 17% 47% 35% 13% 4% 54% 31% 11% 5% 54% 35% 6% 6% 53% 31% 9% 6% in HMOs than covered workers nationally. Conversely, PPOs are more popular in the nation as a whole than in California. Enrollment in high-deductible 2003 5% 24% 54% 17% 3% 21% 61% 15% 3% 21% 57% 13% 5% 1% 20% 60% 10% 8% 1% 17% 55% 10% 17% <1% 14% 57% 9% 20% 2005* 2007* 2009* 2011* 2013* United States plans with a savings option has been stable in California since 2007, contrary to the national trend of increasing enrollment. *Distribution is statistically different from previous year shown. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2007, 2009, 2011, 2013; CHCF/HSC Survey: 2005; Kaiser/HRET California Employer Health Benefits Survey: 2003; author analyses of data from Kaiser/HRET Employer Health Benefits Survey public use file: 2003, 2005, 2007, 2009, 2011, 2013. 2014 California HealthCare Foundation 31
Employees in Self-Insured Plans, by Plan Type California vs. United States, 2013 Plan Choice and Enrollment Thirty-six percent of workers in California United States California were enrolled in a partly or completely self-insured plan 70% in 2013, compared with 61% 61% 59% 6 nationally. The gap between the state and 36% 31% 40% 31% 44% national figures is associated with California s high HMO enrollment, since HMOs are less likely than other 18% plans to be self-insured. All Plans* HMO* PPO POS HDHP/SO *Estimate is statistically different between California and US. Notes: Self-insured plans are plans for which an employer assumes some or most responsibility for paying health care claims rather than buying coverage from an insurer. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option (deductible of at least $1,000 for single coverage and at least $2,000 for family coverage). Sources: CHCF/NORC Survey: 2013; Kaiser/HRET Employer Health Benefits Survey: 2013. 2014 California HealthCare Foundation 32
Likelihood of Firms Making Changes in the Next Year by Type of Change, California, 2013 Increase the Amount Employees Pay for Premiums Increase the Amount Employees Pay for Deductibles Increase the Amount Employees Pay for Coinsurance or Copays Increase the Amount Employees Pay for Prescription Drugs Restrict Employee Eligibility for Coverage 1% Drop Coverage Entirely 3% Very Somewhat Not Too Not at All Don t Know 31% 13% 17% 36% 20% 14% 25% 38% 18% 21% 2 37% 13% 24% 19% 4 10% 7% 80% 9% 81% 5% 1% Changes Forty-four percent of California employers reported they are very likely or somewhat likely to increase the amount that workers pay for premiums in the next year, while 34% said they are very or somewhat likely to increase employees deductibles. Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 33
Likelihood of Firms Making Select Changes in the Next Year by Firm Size, California, 2013 Very Somewhat Not Too Not at All Don t Know Changes Sixty-two percent of large employers in California reported that they are very likely or Small Firm (3 to 199 workers) Employee Premium Contribution Increases 31% 13% 17% 36% somewhat likely to increase the amount employees pay for health Large Firm (200+ workers) 39% 23% 16% 20% 3% premiums in the coming year, versus 44% of small firms. Small Firm (3 to 199 workers) Coinsurance or Copay Increases 18% 21% 21% 37% Large Firm (200+ workers) 11% 2 33% 31% Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 34
Firms that Made Selected Changes in the Past Year by Firm Size and Region, California, 2013 Firm Size Reduced Scope of Health Benefits or Increased Cost Sharing Small Firms (3 to 199 workers) 24% Changes Nearly one in four California firms increased cost sharing for workers or reduced the scope of their health benefits in the past year. Large Firms (200+ workers) 31% 200 to 999 workers 27% 1,000+ workers 36% Region Los Angeles 28% San Francisco 15% Rest of State 24% All Firms 24% Note: Los Angeles and San Francisco are defined as the metropolitan statistical area (MSA). Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 35
Employer Views of Efficacy of Cost-Controlling Measures by Firm Size, California, 2013 All Firms Small Firms Large Firms All Firms Small Firms Large Firms All Firms Small Firms Large Firms All Firms Small Firms Large Firms All Firms Small Firms Large Firms Very Somewhat Not Too Not at All Don t Know Consumer-Driven Health Plans 29% 35% 16% 1 8% 30% 35% 15% 1 8% 2 37% 23% 14% 4% Higher Employee Cost Sharing 24% 26% 20% 28% 3% 24% 26% 20% 28% 3% 19% 26% 26% 27% 3% Disease Management Program 23% 38% 20% 11% 8% 23% 38% 20% 11% 8% 33% 34% 2 8% 3% Changes in Care Delivery and Payment 2 46% 17% 9% 6% 2 46% 16% 9% 6% 19% 40% 25% 10% 6% Tighter Managed Care Restrictions 11% 39% 25% 20% 4% 11% 40% 25% 20% 4% 11% 3 31% 24% 1% Cost Containment California employers viewed consumer-driven health plans, disease management programs, and changes in care delivery and payment as the most effective in controlling health costs. Definitions: Small firms have 3 to 199 workers. Large firms have 200+ workers. Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 36
Firms Asking Employees to Complete a Health Risk Appraisal by Firm Size, 2013 Assessments and Incentives One-third of California firms that percentage of firms asking for an appraisal 33% All Firms Small Firms (3 to 199 workers) Large Firms (200+ workers) offer health benefits invite workers to complete a health risk appraisal or assessment, with large firms 3* being significantly more likely to 48%* do so. Of these firms, percentage that offered financial incentive to do so 54% 54% 53% *Estimate is statistically different between all small firms and all large firms. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 37
Firms Offering Wellness Benefits, 2013 Web-Based Resources for Healthy Living* Smoking Cessation Program* Weight Loss Program* Personal Health Coaching* Classes in Nutrition or Healthy Living* 40% 39% 39% 37% 36% 35% 50% 49% Biometric Screening Such as Blood Pressure or Cholesterol* 36% 35% 60% 58% 63% 66% 70% 73% 71% 86% All Firms Small Firms (3 to 199 workers) Large Firms (200+ workers) Assessments and Incentives Some wellness benefits were common among California employers in 2013, such as webbased resources for healthy living (60% of firms). Large firms generally were more likely to offer wellness benefits than were smaller firms. *Estimate is statistically different between small firms and large firms. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 38
Firms Offering Financial Incentives to Enroll in Lower-Cost or Higher-Quality Plans, by Firm Size, California, 2013 Assessments and Incentives Twenty-eight percent of California 28% 29% All Firms Small Firms Large Firms (3 to 199 workers) (200+ workers) firms offered financial incentives to employees to enroll in a lower-cost plan in 2013. In contrast, only 3% of firms offered financial incentives to enroll in higher-quality plans. 20% 3% 3% 4% Lower-Cost Plan Higher-Quality Plan Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 39
Awareness of Small-Firm Tax Credit and Consideration of Offering Health Benefits as a Result, California, 2013 Percentage of Small Firms* Not Offering Health Benefits Aware of Tax Credit Yes No Don t Know Tax Credit 30% 68% Just 30% of small California firms not currently offering health benefits were aware of the smallfirm tax credit that is part of the Affordable Care Act. Of firms that are aware, 7% have considered Among these firms, Percentage That Has Considered Offering Health Benefits Due to Tax Credit 7% 88% 5% offering health insurance due to the tax credit. *Firms with 3 to 49 workers. Source: CHCF/NORC Survey: 2013. 2014 California HealthCare Foundation 40
Methodology The Survey is a joint product of the California HealthCare Foundation (CHCF) and the National Opinion Research Center (NORC). The survey was designed and analyzed by researchers at NORC and administered by National Research LLC (NR). The findings are based on a random sample of 651 interviews with employee benefit managers in private firms in California. NR conducted interviews from May to September 2013. As with prior years, the sample of firms was drawn from the Dun & Bradstreet list of private employers with three or more workers. The margin of error for responses among all employers is +/ 3.8%, for responses among employers with 3 to 199 workers, it is +/ 5.0%; and among employers with 200+ workers, it is +/ 5.9%. The Kaiser Family Foundation sponsored this survey of California employers from 2000 to 2003. A similar employer survey was also conducted in 1999 in California, in conjunction with the Center for Health and Public Policy Studies at the University of California, Berkeley. The Health Research and Educational Trust (HRET) collaborated on these surveys from 1999 to 2004. The Center for Studying Health System Change collaborated on these surveys from 2005 to 2006. This survey instrument is similar to a national employer survey conducted annually by the Kaiser Family Foundation and HRET. The US results in this study are either from the published reports, or in a few cases, from author calculations from the survey s public-use files. A full analysis of the US dataset is available on the Kaiser Foundation s website at www.kff.org. Both the California and US surveys asked questions about health maintenance organizations (HMO), preferred provider organizations (PPO), point-of-service (POS) plans, and high-deductible health plans with a savings option (HDHP/SO). Conventional (feefor-service) plans are generally excluded from the plan type analyses because they comprise such a small share of the California market. Many variables with missing information were identified as needing complete information within the database. To control for item nonresponse bias, missing values within these variables were imputed using a hot-deck approach. Calculation of the weights follows a common approach. First, the basic weight is determined, followed by a survey nonresponse adjustment. Next, the weights are trimmed in order to reduce the influence of weight outliers. Finally, a post-stratification adjustment is applied. All statistical tests in this chart pack compare either changes over time, a plan-specific estimate with an overall estimate, or subcategories versus all other firms (e.g., firms with 3 to 9 workers vs. all other firms). Tests include t-tests and chi-square tests, and significance was determined at p<0.05 level. Due to the complex nature of the design, standard errors are calculated in SUDAAN. An important note about the methodology: Rates of change for total premiums, for worker or employer contributions to premiums, and other variables calculated by comparing dollar values in this report to data reported in past CHCF or KFF publications should be used with caution, due to both the survey s sampling design and the way in which plan information is collected. Rates calculated in this fashion not only reflect a change in the dollar values but also a change in enrollment distribution, thus creating a variable enrollment estimate. However, rates of change in premiums are collected directly as a question in the California survey. This rate of change holds enrollment constant between the current year and the previous year, thus creating a fixed enrollment estimate. Because the survey does not collect information on the rate of change in other variables, additional rates are not reported. The national survey conducted by Kaiser/HRET, however, stopped directly collecting rates of change in premiums in its 2008 survey. Therefore, the rate of change in total premiums in the US provided in this report uses a variable enrollment estimate. Please note that due to a change in the post-stratification methods applied in 2003, the survey data published in this chart book may vary slightly from reports published prior to 2003. for more information California HealthCare Foundation 1438 Webster Street, Suite 400 Oakland, CA 94612 510.238.1040 www.chcf.org NORC at the University of Chicago 4350 East West Highway Suite 800 Bethesda, MD 20814 301.634.9300 www.norc.org 2014 California HealthCare Foundation 41