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Expand chart
Reproduced from a Kaiser Family Foundation report; Chart: Axios Visuals

The conventional wisdom is that corporate America has a renewed, almost crisis-level concern about rising health costs. But, in a puzzle I am struggling to solve, the data don’t suggest a basis for a new level of urgency about health costs in corporate America.

Why it matters: In fact, just the opposite is true. There's just not that much change — so any solution that's designed for a crisis will probably miss the mark or could unnecessarily harm workers.

The big picture: As Axios has recently reported in Vitals, employer health costs are eating up a larger share of overall compensation that they did 20 years ago. But as this chart shows, over the last 10 years, health costs as a percentage of overall compensation for larger employers — the ones that are most outspoken on the issue — have moved in a narrow band, between 8 and 9 percent of total compensation.

  • For all private employers, it has remained between 7 and 8 percent of compensation over the same period.
  • Premium growth has also been modest — in the 3 to 4 percent a year range — and is not likely to jump in 2019. There is no question that workers are feeling the pain of out-of-pocket costs, but that’s a different problem.

Between the lines: There may be a few explanations for the perception of a health cost crisis in the corporate world. Employers have held costs down, in part, by shifting them to employees. They may now feel cost shifting is nearing a natural limit.

They get blowback about it from their employees, and most have always seen cost shifting as an expedient way to shave their annual premium increase rather than as a meaningful cost containment strategy.

  • Even if health costs have not been growing recently as a percentage of compensation, there still can be sticker shock, with the average cost of a family policy around $19,000 per year, about the cost of a Honda Civic. Plus, health benefits still consume 7.5% of overall compensation for private sector employers — a significant share, though far less than wages (69.6%).
  • The averages also conceal the fact that some employers are getting hit harder than others.

What we've seen in recent years in our employer survey is largely business as usual, with most employers deploying a grab bag of cost strategies, from cost shifting to disease management to wellness programs and more, without expressing great confidence in any one strategy. That approach is more consistent with the data showing the burden of health costs largely stable with moderate cost growth. 

The bottom line: The data on corporate health costs are at odds with the rhetoric of a crisis or the sense that employers are poised to take dramatic action.  Please let me know what I am missing.

Go deeper

DOJ: Russians hacked federal prosecutors

Photo: Stefani Reynolds/Bloomberg via Getty Images

The Russian hackers behind the massive SolarWinds cyber-espionage campaign broke into the email accounts of some of the most prominent federal prosecutors' offices around the country last year, the Justice Department announced.

State of play: DOJ said 80% of Microsoft email accounts used by employees in the four U.S. attorney offices in New York were breached.

Biden's quick-trigger COVID problem

Seems like last year, but this was Thursday in Orlando. Photo: Joe Burbank/Orlando Sentinel via AP

The Biden administration's handling of the Delta surge has left Americans confused and frustrated, fueling media overreaction and political manipulation.

Why it matters: The past year and a half have left Americans cynical about the government's COVID response, and — in many cases — misinformed or uninformed. We're getting fog and reversals when steady, clear-eyed, factual information is needed more than ever.

45 mins ago - Health

Chart: Less than 0.1% of vaccinated Americans infected with COVID-19

Expand chart
Data: CDC; Chart: Danielle Alberti/Axios

Of the 164 million vaccinated Americans, less than 0.1% have been infected with the coronavirus, and 0.001% have died, according to data from the Centers for Disease Control and Prevention.

Why it matters: While "breakthrough cases" have been getting some media attention, the low numbers show that the pandemic is mostly a threat for the unvaccinated population.