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Health care costs fluctuate with employer cost-containment efforts

April 08, 1999

From December 1980 to September 1998, health care costs increased nearly 2½ times as much as other benefit costs, and more than 3 times the pace of wages and salaries. The rate of increase was not constant, however. Health insurance costs accelerated steadily from 1981-84, rose at a slower rate from 1985-87, increased rapidly again from 1988-92, and steadily declined since then.

Cumulative percent changes in wages and salaries, benefits, and health insurance costs, selected periods, 1980-98
[Chart data—TXT]

The periods of slow increases were due in part to employer efforts to contain health care costs, including cost-shifting to employees. The share of employees whose health insurance premiums are wholly paid by employers has declined sharply since 1980. Of full-time workers in medium and large private establishments who participated in medical care plans, 31 percent had individual coverage wholly financed by their employer in 1997, down from 72 percent in 1980. The comparative rates for family coverage were 20 percent in 1997 and 51 percent in 1980.

Other cost containment strategies used by employers included changing health plan design to heighten employer's control over the type or delivery of health care services; instituting major medical deductibles and coinsurance payments; eliminating basic coverage for certain types of care; and shifting to managed care programs or self-funded health plans.

These data are a product of the BLS Employment Cost Trends (health insurance costs) program and Employee Benefits Survey (incidence of health insurance premiums wholly paid for by employers). Additional information is available from "Trends In Health Insurance Costs" (PDF 42K), Compensation and Working Conditions, Spring 1999.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Editor's Desk, Health care costs fluctuate with employer cost-containment efforts on the Internet at http://www.bls.gov/opub/ted/1999/apr/wk1/art04.htm (visited April 24, 2014).

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