Premiums Consume Most of Employer Healthcare Dollars

December 9, 2002 (PLANSPONSOR.com) - Private employers spent a total of $334.5 billion on health services and supplies in 2000, and nearly three-quarters of that total was for contributions to private health insurance premiums.

Between 1987 and 2000, private business spending on health services and supplies increased at an average annual rate of 8%, according to the Employee Benefits Research Institute (EBRI).   In 1987, only 69% of total spending was on health insurance premiums.

State Slate

In 2000, state and local governments, as employers, spent a total of $64.2 billion on health services and supplies for their employees, up from $19.5 billion in 1987. Between 1987 and 2000, state and local governments’ spending on health services and supplies for their employees increased at an average annual rate of 9.6%.

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In 2000, 89% of state and local government spending, or $56.9 billion, was contributions to private health insurance premiums, according to EBRI.

Private-sector employers’ contributions to private health insurance premiums represented 75.6% of total spending (both employer and employee contributions) on private health insurance premiums, down slightly from 78.9% in 1987, according to EBRI.  

On the other hand, state and local governments’ contributions to private health insurance premiums were 81% of total contributions (both employer and employee contributions) to private health insurance premiums, down slightly from 82.5% in 1987.

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