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November 1992, Vol. 115, No. 11
Employee payments for health care services
Allan P. Blostin, Robert B. Grant, and William J. Wiatrowski
Employees covered by employer-provided health care plans usually must pay some portion of their health care costs. Employees' costs (or out-of-pocket expenses) can vary widely, depending on family size, types of care received, and the specific provisions of the health care plan. A family of four with $7,000 in annual health care charges, for example, would pay an average of almost $1,000 in out-of-pocket expenses. Individual families, however, could incur widely varying out-of-pocket expenses - generally ranging between $100 and $1,500, depending upon the provisions of their health care plan.
Required employee insurance premiums also are part of a family's total health care expenses. If a family with low out-of-pocket expenses were required to pay a portion of the plan premium, the family's total cost for health care might approach that of a family with higher out-of-pocket expenses and no required premium.
An employee's share of health care expenses is influenced by both health care needs and plan characteristics, because certain plans are better suited to certain types of families. A family with a sickly member, for example, may choose a plan with high monthly premiums if it covers most charges in full, whereas a healthy individual might elect a plan with low premiums that would only be used in case of a catastrophic illness. This article looks at employee costs for health care and examines a variety of factors that can influence these expenses.
The Bureau of Labor Statistics, through the Employee Benefits Survey, has for the last decade provided comprehensive details on employer-provided health care plans. A limitation of these data, however, is that they make it difficult to compare one plan with another, given the wide variation in plan coverage and funding provisions. One plan might pay the full cost of hospitalization and surgery, but impose an employee premium. Another plan might require an employee to share the cost of health expenses, but to pay no premium. Relative assessment of such different provisions requires a new way of examining health care plans.
This excerpt is from an article published in the November 1992 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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