The state of employer-sponsored health care and how Washington could change it.

Author:Belarmino, Michael

For decades, state and local governments have worked diligently--sometimes within severe budget constraints--to provide benefits that will attract and retain a quality workforce. In general, health insurance remains one of the primary tools that public employers use to remain competitive with private-sector wages and salaries. But in recent years, the rising cost of health care has caused public employers to evaluate benefit offerings and potential changes.

Despite the long-term debate about health-care reform, lawmakers in Washington, D.C., have yet to find a unifying plan that provides broad access to health care while also lowering its cost. The way this debate has developed during the first half of 2017 shows just how difficult it can be to reach a consensus, even with one political party in control of both branches.

Between the public and private sectors, employer-provided health insurance covers more than 177 million individuals in the United States, according to U.S. Census data. The stakes are high, since most people in the United States receive health insurance through their employers.

This article will first take a brief look at the current state of employer-provided health-care insurance and how public employers have responded to increasing costs, followed by an overview of where the issue falls in the debates in Congress and how this could affect state and local governments.


A recent survey showed some of the strategies governments are using to mitigate increased health-care costs. For example, 99 percent of respondents offered health insurance to their employees in 2016. (1) Of that group, 89 percent paid for some or all of the benefit, and on average, nearly 20 percent of individuals receiving coverage are retirees. The number of local government respondents that provides a higher-deductible medical plan has nearly doubled since 2011, the last year the survey was conducted. And of those local governments that don't already provide a high-deductible plan, more than 75 percent will do so within the next one or two years. Auditing or reviewing health plan eligibility or enrollment is another common method for reducing employers' costs, as well as integrating employee participation in wellness programs with health plan data.


As providers of health-care benefits, state and local governments have unresolved concerns. For example, the National Association of Counties came out against the...

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