Summary: With the costs of health insurance constantly outstripping the inflation rate, U.S. businesses are having a hard time providing their workers with health insurance. The average company has seen employer health insurance costs more than double as a share of its total wage bill in the last two decades. The situation has been even more devastating for firms with older or less healthy workers, firms located in high-cost areas, smaller firms, and firms with large numbers of retirees covered by company health plans. The demise of community rating and segmentation of insurance risk groups is evident in the significantly different health care costs experienced by firms, much of which is largely beyond their control in the short term. The large variation in firm costs, as well as the difficulty for some firms in obtaining or retaining health coverage, contributes to the continuing erosion of employer-provided health insurance. Today, some businesses are eliminating health insurance for workers with potentially expensive medical conditions; shifting costs to employees by raising deductibles and copayments; cutting back retiree benefits; and, in some cases, eliminating coverage entirely. As Congress considers health care reform proposals, the huge variation in health care costs become a major point of contention. In GAO's view, unless universal access is a component of health care reform, it is not clear that reforms designed to help those firms with particularly high health care costs will generate any real improvement in access to care.
