Feel like your health benefits are shrinking? They probably are

If you get health benefits through an employer, you have probably seen your costs rise every year. That’s in part because premiums keep going up. But it’s also because many employers are picking up a smaller share of the tab. 

A recent survey by the consulting firm of Towers Watson and the nonprofit National Business Group on Health found that workers are contributing 42% more for health care than they did five years ago. During the same time, the amount paid by employers rose by only 32%. In the last two years, the average employee share of health care costs has grown from 34% to 37%.

You may feel the larger financial burden in several ways. The most noticeable for most is that their employer is covering a smaller portion of the premiums. The average employee share of total premiums was $2,658 in 2012 and is expected to rise to $2,888 in 2013. That’s an increase from 23% to 25%.

Or you may face higher co-payments and deductibles when you receive care. Some plans don’t provide coverage until costs have reached several thousand dollars each year.

At the same time, salary increases have averaged less than 2% over the past three years. That’s really making health care cost inflation hit home for many people.

And the worst may be yet to come. The survey also found that 80% of employers plan to cut the share of premiums they cover even further. Coverage for dependents may be especially hard hit.

For some, this is yet more evidence of the ominous hand of Obamacare at work. However, that is not the case.

Cutbacks in employer health benefits began several years ago, before Obama had even been elected president. The survey found a trend of increasing worker costs dating back to 2008. 

And if the trend is due to rising health care costs, Obamacare may actually have helped to moderate it. Employer health care expenses rose by only 5.1% last year, the smallest rate of increase in 15 years.

Beneath all of these statistics is an unavoidable dynamic. As health care becomes increasingly complex, it becomes increasingly expensive. If medical technology is going to continue to advance, someone has to pay for it. And many employers can’t afford to pick up as large a share any more. 

Obamacare will add a safety net for some. If their employer drops coverage completely, they are guaranteed insurance through an exchange. However, as long as Americans demand more and better health care, the underlying rise in costs will continue.

Insurance has buffered many of us from the true cost of health care for a long time. That is starting to change as workers pay for a larger share of their coverage. That means we now see more clearly how expensive health care really is.

Controlling health care costs will require some tough choices in the years ahead. Political debates will only intensify as we seek ways to stem the rise in expenses while maintaining the quality of our care. However, the shrinking of health care benefits is unlikely to end until we do.