Woman holding hurt knee

High-deductible Health Plans on the Rise

Health Plan Deductibles: ChartHealth insurance is really starting to hurt.

Premium increases and deductible creep, documented in the Kaiser Family Foundation’s comprehensive annual survey of employer health benefits, are eye-popping figures. Although there has been a slowdown in medical inflation and health care spending overall, the growing prominence of high-deductible plans is evidence that more of these costs are shifting to employees.

  • One in four workers today is enrolled in a health insurance plan with a high deductible – up from 4 percent a decade ago – exposing them to larger out-of-pocket expenses than traditional health plans if they become ill. [Kaiser’s definition of high-deductible plans is that they are accompanied by a tax-preferred savings plan to help workers pay their medical bills.]
  • These deductibles average around $2,000 for single coverage, but they exceed $3,000 for about 20 percent of single workers. Deductibles average $4,350 for a family plan, but nearly 20 percent face deductibles exceeding $6,000.
  • Average annual premiums for single workers in these plans range from $773 to $1,021, while family plan premiums are $3,660 to $4,407.
  • Everyone’s deductibles are rising much faster than premiums. For example, the share of the annual premium paid by all single workers with health coverage has increased 19 percent since 2010, to $1,071. But their deductibles have risen 67 percent, to $1,077.
  • Retiree health care trends, in contrast, might be stabilizing. Since 2009, the share of larger companies offering the coverage to retirees has bounced around between 23 percent and 28 percent.

Employers are also paying more for annual premiums, according to Kaiser – about $1,000 more per single worker than they paid in 2010 and about $2,800 more for a family plan.

But it’s clear from the data that this shared burden falls heavily on employees.

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Prime-Age Job Market Still Weak

Job Market chart

The job market appears in fine form. August’s unemployment rate, at 5.1 percent, is now at half of its Great Recession levels.

But while the media latch on to the unemployment rate in the federal government’s monthly jobs reports, economists like Gary Burtless of the Brookings Institution are interested in a different number that’s also part of the monthly update: labor force participation among people in their prime working years, ages 25 through 54.

They are the heart of the labor market, and the trend in their participation rate paints a bleaker picture of the job market, Burtless noted in a recent report. In August, the rate was just 80.7 percent – and still below the 83 percent level prior to the 2008-2009 recession.

Labor force participation is the percentage of Americans working or looking for work. It’s critical to how the job market’s faring, because when it declines it means that even people in their prime working years are giving up on finding a job, indicating underlying weakness in the job market.

On a brighter note, the percentage of prime-age workers who have jobs is rising, though this also remains below pre-recession levels.

Burtless concludes, “The labor market is healing, but the sustained drop in participation is an indicator that the job market is still some way from robust good health.”Learn More

Workplace Benefit Inequality

Inequality goes beyond the wealth and income disparities that frequently make it into today’s headlines. Employer benefits also flow more freely to people at the top.

The newly released survey of employers by the U.S. Bureau of Labor shows how stark the differences are.

The charts below compare the share of private-sector workers in the lowest income bracket who receive benefits – their earnings are in the bottom 25 percent of all U.S. workers’ earnings – with the share in the top 25 percent. Four benefits are compared: health insurance, the percent of health premiums paid by employers, paid sick leave, and – since it’s August – paid vacations.

For the other charts, click here.Learn More

Illustration of the future

The Future of Retirement Is Now

Gray, small, and distinctly female.

This is what the director of MIT’s AgeLab, Joseph Coughlin, sees when he peers into the future of retirement.

“The context and definition of retirement is changing,” Coughlin said earlier this month at the Retirement Research Consortium meeting, where nearly two dozen researchers also presented their Consortium-funded work on a range of retirement topics. Their research summaries can be found at this link to the Center for Retirement Research, which supports this blog and is a consortium member.

Coughlin spooled out a list of stunning facts to impress on his audience the dramatic impact of rising longevity and graying populations in the developed world, and he urged them to think in fresh ways about retirement. In Japan, for example, adult diapers are outselling baby diapers. China already faces a looming worker shortage, and Germany’s population is in sharp decline. In 2047, there will be more Americans over age 60 than children under 15.

“The country will have the demographics of Florida,” Coughlin said. …Learn More

Cover of the book "Catch-22"

Once-Jobless Boomers Still Struggling

Baby boomers face a Catch-22.

Many boomers will have to stay employed longer than they’d hoped to close the gap between what they’ll need in retirement and what they can realistically afford. Yet the job market is tough for job-hunting older workers, and if they are employed, wages stagnate or decline when people get into their 50s.

new report by the AARP Public Policy Institute shows the continuing toll on workers ages 45 and older who have suffered a bout of unemployment since the onset of the Great Recession. Lower pay, fewer hours, or more limited benefits in their new jobs and a prolonged inability to find any job are plaguing these workers. AARP found that only half of those hit by job losses have found work, and the rest either remain unemployed or may have given up and dropped out of the labor force entirely.

AARP’s representative survey of some 2,500 older Americans, conducted late last year, aligns with earlier academic studies looking at the Great Recession’s impact on older workers. The youngest boomers are now 50, so the survey includes some people in Generation X.

The following are AARP’s major findings:

  • Nearly half of the people surveyed earn less in their new employment than they did before losing their previous job. …
  • Learn More

Lazy teenager

Teenagers Today Work Less

Chart: A Decade of Erosion in Teens' Labor Force ParticipationTeen unemployment has shot up in recent years, and their participation in the U.S. labor force has dropped to historic lows.

These data were highlighted in a series of recent reports by the Federal Reserve Bank of Boston expressing concern that this trend may have long-term consequences for today’s teens, including lower lifetime wages resulting from their early absence from the labor market.

“This is a long-term trend that was going on prior to the Great Recession,” the author of the reports, Alicia Sasser Modestino, a former Federal Reserve researcher now at Northeastern University, said in a recent interview.

Last year, nearly 54 percent of teens in the 16-19 age range who were trying to get their first job – their official entry into the U.S. labor market – were unemployed, according to the U.S. Bureau of Labor Statistics. …Learn More


Rewriting the American Dream

Americans once defined success mainly by whether they owned a house or were better off than their parents. Today, it’s a debt-free college education and a comfortable retirement.

U.S. adults feel that their top indicator of financial success is having enough money in the bank to retire (28 percent of adults), followed by sending their kids to college without having to borrow to pay for it (23 percent), according to a telephone survey sponsored by the American Institute of CPAs. Homeownership and upward mobility each came in at a distant 11 percent of the adults, age 18 and up, randomly surveyed by Harris Poll.

“No longer are homeownership and upward financial mobility the hallmarks of financial achievement,” said Ernie Almonte, chairman of the CPA Institute’s Financial Literacy Commission. “Americans have changed the benchmarks for their financial success.” …Learn More