Study: Private Industry Beats State, Local Government with Lower Health Costs | Source: CCH News Library [via Wolters Kluwer]
November 13, 2009 9:50AM EST
The cost of providing health care coverage is much higher for state and local governments than it is for employers in private industry, according to research from the Bureau of Labor Statistics (BLS). The survey, New Health Participation and Access Data from the National Compensation Survey, found that in state and local governments, the average per-employee health care cost was $6,430 in 2008, compared with $3,527 for the private industry. The BLS provided two reasons for this. First, state and local government employers have higher participation in health care as compared with private industry (78 percent versus 57 percent). Second, state and local government employers pay a higher percentage of premiums (89 percent versus 78 percent). If these two factors were the only factors, the BLS noted that health care costs would be 56 percent higher in state and local government than in private industry. However, as these are not the only factors, the BLS found that the actual difference between the annual health care costs of the government and private sectors is about 80 percent. The BLS also discussed the differences in its surveys between what the bureau calls “health care plans” and “medical plans.” Health care plans include plans that cover doctor’s visits and hospitalization, as well as plans that only cover dental or vision or prescription drug benefits. The BLS defines a medical plan as one that includes core medical coverage such as doctor’s visits and hospitalization, but does not include dental, vision, or prescription drug benefits. The BLS noted that an employee’s access to health and medical care benefits are virtually identical for all kinds of workers. According to the BLS, this is because when employers offer a health care package, they also normally offer a medical plan. Although they could only offer dental, vision, or prescription drug coverage without offering a medical plan, employers rarely do so. The rest of the story . . . .
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