In general, it's not fully appreciated how much employers pay for health care. But this story, which means to focus on the rising costs to workers, does a good job illustrating it. According to a new study by Hewitt Associates, workers will be paying $3,826 "out-of-pocket" next year. Companies, meanwhile, will be paying more than double that: $8,863 per employee. The term "out-of-pocket" actually obscures more than it illuminates. It denotes money that workers will pay directly after they receive their wages. But the company isn't taking the $8,863 out of executive profits. That's worker compensation money. If it weren't going into health care, it would probably be going into wages. It's money that, in some sense, belongs to the worker but never makes it into pocket. Part of the reason action on health reform is so slow is that workers don't quite realize how much they are directly paying for their health care. The sense is that money paid by employers is not their money. But it is. The available evidence suggests that the wage stagnation of the past few years is heavily related to the rapid rise in health care costs. If workers understood that health care was costing them $12,700, rather than $3,800, they might be more desperate to get costs under control. But as it is, the fractured payment structure hides the true costs of the system and manages to make the situation look less desperate than it actually is.
