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2013 Study Results: Iowa Employers Report 9% Increase in Health Premiums

David P. Lind BenchmarkToday, we issued our Press Release on the results from our 15th annual Iowa Employer Benefits Study©. As you might imagine, there is a wealth of data coming from this year’s survey, but as always, one of the most newsworthy finding is the headline number – 9 percent.


Average Health Insurance Rate Increases in Iowa 

It is important to distinguish how this increase is determined each year. The 9 percent increase is an average that factors in employers receiving no rate change, an increase or decrease in their premiums. This number represents the average increase in premiums employers received PRIOR to making design changes to their medical insurance plans – such as increasing cost-sharing arrangements with employees. After altering the plan design, the net increase over the past year was a modest three percent for single premiums and under five percent for family premiums.

How does this net increase compare to the national average? According to the 2013 Employer Health Benefits Survey conducted through the Kaiser Family Foundation/Health Research & Educational Trust (HRET), this average is quite similar to the five percent increase on single coverage and four percent on family coverage.

We have been surveying employers since 1999 (2001 was the first year we began asking questions on premium adjustments). With this relatively “tame” increase (compared to prior double-digit increases between 2001 and 2010), Iowa employers reported making the following changes during the past 12 months:

  • Passed some or all of the increased costs to the employees (57 percent)
  • Absorbed the entire cost increase (33 percent)
  • Increased deductibles (20 percent)
  • Raised out-of-pocket maximums (10 percent)
  • Increased office visit co-payments (8 percent)
  • Increased prescription drug co-payments (7 percent)
  • Changed insurance companies (8 percent)
  • Reduced pay raises or bonuses (6 percent)
  • Offered Consumer-Driven Health Plans (5 percent)
  • Began wellness program initiatives (4 percent)

Since 1999, the annual Iowa single premium has increased by 171 percent, while the family premium increased by 158 percent. By comparison nationally, over that same time period, Kaiser reported increases of 168% and 182%, respectively.

Over the course of 15 years, employee contributions have increased by 117 percent for single coverage and 121 percent for family coverage. These numbers are more staggering when compared to the average weekly wage (for all industries), which increased by only 37.5 percent between 2001 and 2012 (Source: Iowa Workforce Development).

The overall percentage of Iowa employers offering health coverage dropped to 77 percent from 81 percent in the 2012 study. This four percent drop is considered statistically meaningful. A greater percentage of smaller employers with fewer than 20 employees reported not offering health coverage in the 2013 survey. This number will require additional scrutiny in future studies.

Iowa Employers Offering Health Insurance

Employer Attitudes on Health Reform
A number of questions relating to the Affordable Care Act (ACA) were directed to employers during this year’s survey. One key finding is that less than two percent of Iowa employers with over 50 employees indicated they would discontinue offering health coverage and, instead, incur the $2,000 penalty per employee. It must be noted that employers responded to these questions PRIOR to learning the employer mandate was delayed until 2015. This response from employers, however, does provide a glimpse into 2015 when the mandate takes hold.

When asked about the likelihood of discontinuing health coverage in the next three years due to health reform requirements, only 2.6 percent indicated they would not offer coverage (all coming from smaller employers). No employer with at least 250 employees reported they would drop coverage.

Plan Design Attitudes
Iowa employers were also asked a series of questions about reducing health care costs now and during the next five years. Over 42 percent of employers currently encourage the use of high-quality hospitals and physicians. This is accomplished either through their health insurance providers or by lowering employee cost-sharing to provide incentives to use designated health providers. Another 11 percent plan to include this approach within the next five years.

Over 11 percent of employers currently reward employees with reduced premiums or lower cost-sharing for achieving certain health outcomes, such as improved Body Mass Index (BMI) or lower cholesterol, while 19 percent plan to encourage this approach during the next five years.

The complete 2013 Iowa Employer Benefits Study© will be available for purchase and download in the near future.

The above information is just a small fraction of our survey results. To learn more, we invite you to subscribe to our blog.

Coming Soon!
2013 Iowa Employer Benefits Study©

David P. Lind BenchmarkWe are very pleased that nearly 1,060 Iowa employers have responded to our 2013 Iowa Employer Benefits Study©! This surpassed our goal of having 1,000 organizations participate in our 15th annual survey. The results of this study will be available in early September.

To put this response into meaningful perspective, the recently released 2013 Kaiser/HRET Employer Health Benefits Survey, a highly-regarded national survey, reported 592 respondents in the Midwest Region that consists of 12 states (including Iowa). In other words, our survey has 78 percent more respondents — in just ONE state! This means that we are able to accurately report the specific benefits offered by Iowa employers using extremely credible data.

In addition to this phenomenal response, in mid-September we will unveil new and exciting enhancements with this year’s study. Some of the changes include:

  • The Overall Summary of the 2013 Iowa Employer Benefits Study© will be available in an electronic format, allowing employers to access this report on our website. As with our 2012 survey, printed studies will no longer be available.
  • Employers who participated in the 2013 Survey will be sent an invitation in late-September to download this report using a specific pass code.
  • Employers who did not participate in the 2013 Survey will be able to download this Overall Summary. A fee will be required to access this report.

In addition to the above enhancements, we’ll be introducing a new benchmarking tool in September, allowing employers to compare their specific benefit offerings with other Iowa employers. This innovative benchmarking tool, Lindex-Online® has been developed with simplicity and intuitiveness in mind. In addition to learning how your benefits package compares with other Iowa organizations (using many criteria such as employer size, industry and location), employers will now be able to learn their individual Lindex® score and how their total benefits package compares to Iowa norms. I must say, there are some very innovative aspects about this benchmark program that will be extremely helpful to employers of all size and industry!

Please visit our website frequently to learn when this new web-based tool will be available. An easy way to stay informed is to subscribe to this blog.

Iowa Employers to Rate Health Care Providers

Rating Iowa Health Care ProvidersIn our 2013 survey, we are asking Iowa employers to rate hospitals and physicians within their communities on 11 important performance measurements. Without a doubt, this particular module of our 2013 Iowa Employer Benefits Study© will be quite fascinating. To the best of my knowledge, Iowa employers have never been asked to rate health care providers in their communities – until now.

It’s about time.

Asking Iowa employers to rate health care providers will be important for a number of reasons. Two key reasons are:

  1. Employers contribute a considerable portion of the medical insurance premium for employees and their families. From our 2012 Iowa Employer Benefits Study©, the average employer contributes about 80 percent of the employee-only premium, or about $4,400 annually. The employee contributes the other 20 percent, or $1,065 annually. For employees with family health insurance coverage, the employer pays about two-thirds of the annual family premium ($8,900), while the employee pays the other one-third ($4,657). Needless to say, the average Iowa employer is very generous when picking up the health care tab for their employees.
  2. Despite annual premium increases, Iowa employers have CONSISTENTLY absorbed escalating costs since 1999 (the first year our Study began).  Employers make this ‘investment’ to maintain and improve the health and well-being of their workforce. The illustration below compares Iowa to the national average on employee contributions for health coverage since 1999. The national numbers come from Kaiser/HRET.

Average Percentage of Premium Paid by Covered WorkersThe two reasons above help illustrate the necessity of having Iowa employers provide input on the “value” they receive from this considerable outlay of money to our health care provider community. How Iowa employers perceive the performance of health care providers will cast an important light on measurement area(s) that may need improvement. Our new module of questions will help us understand just how satisfied employers are with this perennial investment. We do realize, however, that there are other external influences that must be accounted for when assessing the provider communities – such as public policy issues, insurance vendor arrangements, patient engagement, etc. 

The 11 performance measures will be based on a 1 to 10 scale, where 1 means “failing” and 10 means “excellent.” The performance measures for both hospitals and physicians include:

  • The transparency of costs
  • The transparency in medical outcomes
  • The coordination of care among providers
  • Keeping costs reasonable
  • Consistent quality of care
  • Focus on wellness and health promotion
  • Access to services
  • Electronic health records
  • Efficiency
  • Concern for patient satisfaction
  • The ability to engage patients

Finally, employers will also be asked to provide feedback on how much they trust (or don’t trust) the medical provider community in which they operate. As mentioned in previous blogs, TRUST is an extremely important measurement to any industry, but absolutely critical in the health care world.

The results of this important survey will be published early this Fall by our new, sister organization, Heartland Health Research Institute and will be shared with the public.

To learn more, we invite you to subscribe to our blog.