Higher Cost, Less Connecticut Health Insurance Coverage

Higher Costs, Less Coverage

To make matters worse, workers are increasingly paying more for less. Rising health care costs and the associated increase in health insurance premiums are leaving employers struggling to cope. Faced with mounting costs, employers must make tough decisions that often come down to either cutting benefits or reducing wages.⁵ Some employers are forced to take the drastic step of dropping coverage for their workers. This is most common among small businesses, which have seen the largest increases in premiums. ⁶ Other employers attempt to hold down rising premiums by offering "thinner" coverage. Providing health plans with higher deductibles, more copayments, and fewer benefits has become a common method of attempting to control rising insurance costs. ⁷

As health insurance costs rise, the trend toward offering thinner coverage continues, with plans increasingly moving away from fully covered benefits to partial coverage with higher cost-sharing, and, eventually, to the elimination of some benefits completely. ⁸ In addition, coverage is evolving to require higher cost-sharing for services such as hospital care and prescription drugs. Workers now face much greater cost-sharing when hospitalized than they did in the 1990s, with half required to pay hospital-specific deductibles and copayments. ⁹ Cost-sharing for prescription drugs is also on the rise, with a move toward drug plans that make individuals pay more for certain drugs. ¹⁰

Increases in cost-sharing continue in spite of the fact that experts in the field -- including insurance company executives -- generally concur that such increases will not result in a significant reduction in premiums or overall health care costs. ¹¹ Moreover, increases in cost-sharing have a detrimental effect on the health and well-being of workers. A sizeable body of research indicates that increases in cost-sharing reduce access to necessary care. ¹²