Washington D.C. — As costs of care continue to rise, employers face significant affordability challenges when offering insurance coverage, and their employees face affordability hurdles when using their coverage. The Center for American Progress has released two new reports that offer solutions for how to address the rising costs of employer-sponsored insurance (ESI) and that introduce a new policy recommendation about how an employer public option could reduce ESI costs, lower health care prices, and increase workers’ access to affordable comprehensive coverage.
In 2022, the average annual ESI premium was $8,435 for individual coverage and $23,968 for family coverage—a 43 percent and 47 percent increase, respectively, over the previous 10-year period. The primary drivers of these increased costs are rising prices of health care services and prescription drugs. Employers bear the burden of these high prices and, ultimately, pass down many of these costs to the employees they cover. CAP has released two reports that offer federal solutions to lower these rising costs of ESI:
- Making coverage more affordable by increasing transparency and addressing consolidation, including by creating a national all-payer claims database and expanding the authority of antitrust enforcement agencies
- Improving employee access to equitable and comprehensive plans
- Reforming the prescription drug market to introduce more competition and bring down the prices that employers and employees pay for medications
In addition, CAP makes the case for how an employer public option could help reduce the cost of providing ESI; lower health care prices; and increase workers’ access to affordable, comprehensive coverage. The second report examines the various models for public option reform and outlines design recommendations to create an effective employer public option. Some of the benefits of an employer public option include:
- Making coverage more affordable for workers and employers.
- Advancing health equity by improving affordability and access to comprehensive coverage.
- Reducing gaps in coverage and enabling workers to maintain their sources of care and covered treatment.
“As health care costs continue to rise, employers are calling on the federal government to deliver solutions,” said Andrea Ducas, CAP vice president of Health Policy. “Congress has the opportunity to take several actions to make ESI a more affordable, comprehensive coverage option for both employers and employees for the years to come.”
Read the reports:
For more information on this topic or to speak with an expert, please contact Sarah Nadeau at [email protected].