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The Keckley Report

The KFF Employer Health Benefits Survey: An Accurate but Incomplete Picture

By November 15, 2021March 1st, 2023No Comments

Last Wednesday, Kaiser Family Foundation released its 2021 Employer Health Benefits Survey—the 23rd in the series. Headlined Average Family Premiums Rose 4% This Year to Top $22,000; Employers Boost Mental Health and Telemedicine amid COVID-19 Pandemic, Benchmark KFF Survey Finds, the news release offers these highlights of the findings:

  • “Annual family premiums for employer-sponsored health insurance rose 4% to average $22,221 this year… with workers contributing $5,969 toward the cost of family coverage…The average single deductible stands at $1,669 for workers who have one, similar to the average in each of the past two years ($1,644 in 2020; $1,655 in 2019) but up significantly since 2011 ($991). This year 85% of covered workers have a deductible in their plan, up from 74% a decade ago.

  • The annual change in premiums roughly matches…in workers’ wages (5%) and inflation (1.9%), … Since 2011, average family premiums have increased 47%, more than wages (31%) or inflation (19%).

  • Combined, the growing share of workers with deductibles and rising average deductibles over the past decade have increased the burden of deductibles by 92% across all covered workers.”

But 15 paragraphs later in “other findings” is perhaps the most significant finding:

  • 59% of employers offer health benefits, largely unchanged over the past decade including 99% of firms with at least 200 or more workers and 56% of firms with fewer than 50 workers.”

In the 1st version of its survey (1998), only small employers with fewer than 200 workers were surveyed. The 23rd version represents benefits offered by cross section of America’s 3 million firms i.e. from small (59% employ 3 to 9 workers and employ 7.3% of all workers insurance) to big (1% of firms that employ 5,000+ workers representing 36.7% of all workers). The KFF researchers note that changes in employer benefits participation are “unchanged” but noticeable trends suggest changes ahead:

Uptake Levels for Employer-Sponsored Benefits are Declining

Last year, health care benefits were available to 71% of private industry workers and 54% participated in the benefit for a take-up rate of 77%. By contrast, 89% of state and local government workers had access to health care benefits, with a take-up rate of 88%. Dental care benefits were available to 40% of private industry workers vs. 60% of state and local government workers. Data show employees are increasingly choosey about their benefits’ choices and hyper-sensitive to their out-of-pocket obligations.

As Health Costs for Employers have Gone Up, More Cost has been Shifted to Employees

In 1990, employees bore 19% of responsibility for the direct costs of their benefits; last year it was 11%. Between 2018 and 2020, employers shifted 2% more of total health costs to their employees and reduced their own share by the same amount but overall health costs grew faster for both. In the BLS consumer price index for October, the medical care index increased 0.5%– its largest monthly increase since May 2020 (hospitals +.5%, prescription drugs + 0.6%; physician services unchanged). Escalating health costs combined with high use of high deductible plans means growing numbers of employees have access to benefits they can’t use or afford. And with that, growing tension between employers and employees about their benefits.

A cloud now hangs over employer-sponsored health benefits today. It’s surfaced of late as the Biden administration’s employer vaccine mandate has been debated. And it will intensify in coming weeks as employers face uncertainty about the economy and the workforce:

The Economy

The supply-chain bottleneck and its inflationary impact on energy, food and staples prices is unlikely to be resolved before mid-2022. The toxic political environment and the potential for a pandemic hangover lend to uncertainty. And the stock market’s unsettled after Wednesday’s Labor Department October Consumer Price Index jumped 6.2% including the core (non-food and energy) index jumped 4.6%. The S&P 500 Index dropped .3%, the Dow dropped .6% and the Nasdaq dropped .7%.

Employee benefits represent 8.2% of employee compensation in private companies; 11.4% in government and public sector organizations. They are operating costs for which an ROI is often unmeasured if considered at all. How economic conditions change in 2022 and beyond will dramatically impact how employee health benefits are designed and offered.

Workforce Resilience

As Black Friday and Cyber Monday approach, 54% of the population is worried about their household finances and 29% are concerned about their job security. 38% say they’re worried about paying their medical bills and the majority think hospitals, drug companies and health insurers guilty of price gauging. The post-pandemic workforce is dicey for employers, especially for those already facing shortages as a result of ‘the Great Resignation.’ Last month, 4.4 million more Americans quit the workforce—the 6th straight month of record quits and highest single month since December 2000. The labor force participation rate is holding steady at 61.6% but the economy lost 9.4 million jobs in 2020 and the GDP decreased 3.5% last year to $20.9 trillion.

The workforce is exiting the pandemic stressed out; many are on thin ice financially and emotionally. Regulators are calling for equity in how these needs are met. Private investors are delivering new solutions to C suites that promise whole person, convenient, technology-enabled services at predictable prices traditional providers can’t match. And the workforce and their employers are receptive.

Friday, a federal appeals court ruled that the Biden administration’s employer vaccine mandate is an over-reach. In 7 states, laws have passed prohibiting employers from requiring employee vaccinations and are pending in other states.

Employers are ground zero for today’s debate about the public’s health and Covid. The KFF 2021 Employer Benefits Survey is a reminder that big businesses public and private provide health benefits that many smaller companies can’t afford or elect to forego. That lends to disparities in communities and sub-optimal health nationwide.

When the dust settles from the pandemic, perhaps policymakers should harness employers to remedy the health system’s flaws. After all, they pay for it.



“Average Family Premiums Rose 4% This Year to Top $22,000; Employers Boost Mental Health and Telemedicine amid COVID-19 Pandemic, Benchmark KFF Survey Finds”; November 10, 2021; Kaiser Family Foundation

National Health Expenditure Accounts: 1960-2019; CMS

Health Insurance Coverage in the United States: 2020; September 14, 2021; United States Census Bureau

National Center for Health Statistics Health Insurance Statistics; CDC

Cohen RA, Terlizzi EP, Cha AE, Martinez ME. “Health insurance coverage: Early release of estimates from the National Health Interview Survey, 2020.” National Center for Health Statistics

“Employee Benefits in the United States – March 2021”; September 23, 2021; BLS

“Consumers Without Financial Anxiety Are Helping Drive BNPL, New Credit Card Holiday Growth”; November 9, 2021; Morning Consult

“What Can the Federal Government Learn From States About Health Insurance Plan Standardization?”; November 5, 2021; JAMA Health Forum

“Healthcare Affordability Results from a National Survey”; August 2021; Robert Wood Johnson Foundation

Claxton et al “Health Benefits In 2021: Employer Programs Evolving In Response To The COVID-19 Pandemic”; November 10, 2021; Health Affairs


Recent Deal Announcements

Ryse Health– an online health management platform designed for type 2 diabetes sufferers that serves the D.C. Metropolitan and surrounding areas- completed an early-stage VC financing round this month under the classic convertible note term structure. The disease management space has seen success from names like multi-specialty disease management provider Livongo (now a subsidiary of Teladoc) which is valued in the $14B range. There are similar names to Ryse Health that are a bit more mature and are rising through the ranks like JV pharma-backed and Newton, MA based Onduo; or San Francisco, CA based multi-specialty disease management provider Omada. These are just a few companies with similar, overlapping specialty digital health models, but the ecosystem is far larger and extends to just about any disease that can be managed- at least in part- remotely.

Care Message– a preventive care focused patient engagement platform out of San Francisco, CA designed to make underserved populations healthier- received additional late Stage VC funding earlier this month. The messaging platform provides several services, such as patient education, reminders for preventive screening, and other disease management services through community health centers, health plans, and free clinics alike. The company is primarily backed by impact and nonprofit venture funds, but also includes well known global investment banks. Similar patient education niche platforms have gained quite a bit of attention from investors, such as women’s health focused Tia, which raised $100M in its Series B funding round earlier in the year. Obviously, less of an impact investing play, but nonetheless shows the growing market demand for patient engagement platforms of all shapes and sizes.

Pew Global Survey: U.S. Health System Seen Negatively in Other Developed Countries

Pew Research surveyed consumers in 17 industrialized countries. Highlights:

  • Across the 16 publics polled outside of the U.S., a median of 72% say U.S. technology is the best or above average and 71% think American entertainment is the best or above average.

  • The U.S. health care system gets poor reviews: A median of 48% say it is below average and 18% consider it the worst among developed nations.

“What People Around the World Like – and Dislike – About American Society and Politics”; November 1, 2021; Pew Research

Study: Medicare Overpaid MA Sponsors

Health policy researcher Richard Kronick analyzed newly released Medicare Advantage billing data concluding Medicare overpaid the private health plans by more than $106 billion from 2010 through 2019. Highlights:

Nearly $34 billion of that new spending came during 2018 and 2019, the latest payment period available. Risk scores in 2019 were 19% higher across Medicare Advantage plans than in original Medicare. The Medicare Advantage scores rose by 4% between 2017 and 2019, faster than the average in past years.

Related: In July, the DOJ joined a whistleblower lawsuit accusing Kaiser Permanente of making its Medicare Advantage members appear sicker than they were to collect higher payments. The agency has made similar accusations against insurers like Anthem, UnitedHealthcare, Independent Health and Clover Health and health systems like Sutter Health in California. And last Monday, Oak Street Health which serves 132,000 Medicare and MA members revealed that the DOJ is investigating whether it violated the False Claims Act in its third-party marketing agreements.

“Federal law enforcement has stepped up scrutiny of companies operating in the lucrative Medicare Advantage market. Oak Street Health is the latest target”; November 9, 2021; Business Insider

Leapfrog Awards D/F Safety Grade to 8% of hospitals

In its fall 2021 Leapfrog Hospital Safety Grade, Leapfrog awarded 32% (928 hospitals) of its total 2,901 sample an A grade, 26% (757 hospitals) a B, 35% (1,007 hospitals) a C, 7% (190 hospitals) a D, and fewer than 1% (19 hospitals) an F. Four states saw more than 50% of their hospitals receive an A rating: Virginia (56.2%), North Carolina (55.1%), Idaho (53.9%), and Massachusetts (51.7%).

“2021 Leapfrog Hospital Safety Grade”; November 10, 2021; Leapfrog

RWJ Poll: Health System Overcharged Consumers

Robert Wood Johnson Foundation conducted an online survey with 2,555 adults. Findings:

  • 63% of respondents say they were charged too much for their care, 70% are unsure what their care will cost and nearly half say they should have just stayed home and taken care of the issue on their own. More than half of the respondents want big fundamental changes to the health care system.

  • Those considered responsible for high health costs are health insurance (71%) and drug companies (69%).

  • 70% of respondents say cost remains their biggest health care concern. They support government price negotiation for prescription drugs (86 %), tax credits for Americans to seek affordable insurance (78%), expanded eligibility for public programs including Medicare, Medicaid and Children’s Health Insurance Program (73%), and increased transparency on prescription drug pricing (91%).

“Healthcare Affordability Results from a National Survey”; August 2021; Robert Wood Johnson Foundation


Oklahoma Court Throws Out Lower Court Opioid Ruling

Last week, in a 5-1 ruling, the Oklahoma Supreme Court overturned a $465 million judgment against Johnson & Johnson (JNJ) in a lawsuit alleging the health care giant fueled the opioid crisis through deceptive marketing of painkillers and created a public nuisance. The court determined that the state’s public nuisance law does not extend to the manufacturing, marketing, and distribution of prescription opioids. Notably, an accompanying WSJ Editorial called the court proceedings ‘Opioid Tort Abuse’ noting “They (Courts) aren’t forums for policy making, or corporate retribution, or a federal judge to force a settlement on defendants as a capstone to his career.”

“A Case of Opioid Tort Abuse The Editorial Board”; November 9, 2021; Wall Street Journal

BLS October 2021 Consumer Price Index: Medical Care Prices Increase Highest Since May 2020

The October CPI was released last Wednesday. Highlights:

  • The Consumer Price Index (CPI) for All Urban Consumers (CPI-U) increased 0.9% in October on a seasonally adjusted basis after rising 0.4% in September, Over the last 12 months, the all-items index increased 6.2% before seasonal adjustment.

  • The food index increased 0.9% as the index for food at home rose 1.0%. The index for all items less food and energy rose 0.6% in October after increasing 0.2% in September.

  • The medical care index increased in October, rising 0.5%, its largest monthly increase since May 2020. The index for hospital services rose 0.5%, and the index for prescription drugs advanced 0.6%; the index for physicians’ services was unchanged.

BLS October 2021 Consumer Price Index

CMS Updates Guidance on Nursing Home Visitation Policies, Access to Outside Surveyors

Friday, CMS issued new guidance on nursing homes allowing visitation for residents “at all times.” It also advised surveyors to take a more critical look at things such as nursing staff competency, use of antipsychotics and potential abuse and neglect issues. The updated CMS memo on visitation also states that long-term care facilities are not allowed to restrict access to surveyors based on vaccination status, nor ask a surveyor for proof of their vaccination status as a condition of entry into the facility.

Marselas et al “CMS increases oversight of nursing home survey process and expands nursing home visitation policy in 2 new guidances”; November 12, 2021; McKnights


COVID Trackers, CDC Guidance, & Other Resources

Pfizer seeks Booster Authorization for All Adults 18+

Last week, Pfizer Inc. and partner BioNTech SE asked U.S. health regulators to expand the authorization of their Covid-19 booster to people as young as 18 years old.

The Food and Drug Administration in September cleared a third dose of the Pfizer-BioNTech vaccine for adults who are 65 years and older or are at risk of severe disease and death, including because of their jobs or where they live. Pfizer and BioNTech said last month that the booster was 95.6% effective at preventing symptomatic Covid-19 in a study that enrolled more than 10,000 subjects 16 years and older.

The government has also cleared booster shots of vaccines from Moderna Inc. and Johnson & Johnson, and is backing mixing-and-matching the extra doses.

“Pfizer, BioNTech Ask FDA to Expand Covid-19 Booster Use to All Adults”; November 9, 2021; Wall Street Journal

Moderna-NIH Fight Over Vaccine Ownership

Moderna’s vaccine patent application with the United States Patent and Trademark Office names several employees as the sole inventors of a crucial component of its coronavirus vaccine, excluding three government scientists who were principals in the project for 4 years.

Moderna received $1.4 billion to develop and test its vaccine and another $8.1 billion to provide the country with half a billion doses. It has struck deals with 26 countries to provide Covid-19 shots and expects to make generate $18 billion this year and $35 billion through 2022 with its vaccine.

“Moderna and U.S. at Odds Over Vaccine Patent Rights”; November 9, 2021; New York Times