States offer employees rich, low-deductible plans

“Collectively, states spent about $31 billion to insure 2.7 million employee households in 2013, a slight uptick in spending from 2011 and 2012 after adjusting for inflation,” the report said. States paid 84 percent of the total on average, and employees paid 16 percent, the report said. On average, state employees paid $963 a month in premiums.

“However, this average masks sharp differences across the states, due to factors such as plan richness, average household size, provider price and physician practice patterns, as well as the age and health status of enrollees,” the report said. “Although meaningful state-to-state comparisons are complicated by a number of factors, including who is covered (i.e., the number, age, and health of enrollees) and differences in health plan benefit design, this analysis offers a nationwide benchmark against which states can be compared.”

Key findings about state health benefit trends in 2013 included:

• While the average per-employee per-month premium for coverage of employees and dependents was $963, “employees paid an additional $70 per month, on average, in cost-sharing elements such as deductibles, copayments, and coinsurance.”
• Arkansas, Mississippi, New Mexico, South Carolina, and South Dakota had relatively low per-employee premiums, while those in Alaska, New Hampshire, New Jersey, Vermont, and Wisconsin were comparatively high.
• “State health plans were generally ‘rich,’ paying on average 92 percent of the typical enrollees’ health care costs. By way of context, these plans would be designated ‘platinum’ plans within the new health insurance marketplaces.”
• State employers, unlike their private sector brethren, have been slow to shift to high-deductible plans to save money. “In those where they were offered, relatively few employees chose to enroll in them. Nineteen states offered at least one plan with an annual deductible of $1,500 or more, up from 16 states in 2011. Among those 19 states, a median of 7 percent of state employees enrolled in them. Nationwide, only 4 percent of state employees enrolled in such a plan. Forty-five percent were enrolled in plans with no deductible.”

“How states manage their employee benefits — as well as other elements of their employee compensation package — affects their fiscal health; their ability to recruit and retain qualified staff to deliver critical public services; and their employees’ physical, mental, and financial well-being,” the researchers observed. “In addition, as states try to reform the health care payment and delivery systems within their borders, how they structure the health insurance of their employees can serve as a model for other employers.”

The full report runs 52 pages and contains considerable state-by-state comparison data.