Health benefits too expensive, execs say. Time for greater government involvement?
Health care costs are excessive, but business owners are starting to doubt they have the ability to bring them down on their own.
More than 80% of decisionmakers at U.S. businesses believe the cost of providing health benefits will become unsustainable in the not-too-distant future and will require a greater government role in providing coverage and restraining costs.
The Purchaser Business Group on Health and KFF recently asked more than 300 large-business executives about the cost of health benefits and the role of government. Health benefits comprise 7.3% of employee compensation for private-sector employers, and the gap between their costs and public-sector expenses is growing. The Biden administration is advocating for a more expansive government role in both coverage and cost containment.
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“The responding employers largely believe that the cost of health benefits is excessive,” according to the survey report. “Respondents generally expressed some agreement with a variety of policies that would expand the government’s role in health benefits, including limiting provider prices in non-competitive situations and expanding options for employees and others to enroll in public programs.”
Among the findings:
- Nearly all respondents agreed that health benefit costs are excessive. About half moderately agreed with the statement that employer costs for health benefits are excessive, with another 33% considerably or strongly agreeing.
- More than half agreed that employers collectively can change health care costs to a moderate extent, with another 29% saying that employers can change costs to a considerable or large extent.
- Executives overwhelmingly believe that a greater government role in providing coverage and containing costs would be better for their business (83%) and better for their employees (86%). Among this group, 43% said this could reduce employee premium costs, and 42% said it could reduce costs for employers.
- Large shares of respondents agreed that policymakers should pursue policies that would strengthen antitrust enforcement and prohibit anti-competitive conduct by providers, pharmaceutical manufacturers and health plans (92%) or improve the transparency of prices and the total cost of care (90%).
“The new political landscape may portend a new and more viable discussion of expanded roles for government in providing health coverage and restraining prices and costs,” the report concluded. “While this has long been controversial, the results of this study suggest that the employers are frustrated by the current health-care system and their limited opportunities to address cost and that they may be open to options that involve a broader role for government.”
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