In September 2014, this press release was updated to reflect changes in the report, which include revised data for Alabama, Florida, Illinois, Maine, Nevada, New Jersey, North Dakota, and Wisconsin, as well as affected national averages. Further, language was added to the report to clarify states’ total annual employee health plan expenditures. In 2013, states and their employees paid $30.7 billion to insure 2.7 million employee households. States paid $25.1 billion of this total.
WASHINGTON—Spending on health insurance for state employees was up slightly in 2013 over the previous two years, with the cost varying widely from state to state. According to a first-of-its-kind analysis from the State Health Care Spending Project, an initiative of The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation, 49 states (data for Pennsylvania were unavailable) insured 2.7 million state employee households in 2013 and—together with their employees—spent nearly $31 billion on health insurance. States paid $25.1 billion of this total.
The report, "State Employee Health Plan Spending: An examination of premiums, cost drivers and policy approaches," found that paying for employee health insurance is second only to Medicaid as a portion of states’ overall health care spending. On average, monthly premiums were $959 per employee, with the state covering 84 percent of the premium and the employee picking up 16 percent. Researchers analyzed data for the states and examined the factors driving spending on state employee health care—and states’ ability to influence these factors.
The report’s key findings include:
"A state’s ability to recruit and retain qualified staff to deliver critical public services, as well as the need to provide for their employees’ physical, mental, and financial well-being, are affected by how they manage their employee benefits and their costs,” said Pew’s Maria Schiff, director of the State Health Care Spending Project. “Until now, little has been known about how state health plans and costs compare to one another. This analysis offers important context for policymakers as they work to make their employee benefit systems effective, affordable, and sustainable."
Researchers worked with Milliman Inc., an actuarial firm, to create nationwide benchmarks against which to compare states’ health plans and costs. Milliman’s database, which contains publicly available state and local governments’ health insurance data, includes key pieces of information, such as total premiums, employer and employee share of premiums, cost-sharing arrangements, number of enrollees, and total health care expenditures, among others.
This report is part of a project series examining seven major areas of state health care spending, which will provide a comprehensive examination of health programs funded by states.
The Pew Charitable Trusts is driven by the power of knowledge to solve today’s most challenging problems. Learn more at www.pewtrusts.org.
The John D. and Catherine T. MacArthur Foundation supports creative people and effective institutions committed to building a more just, verdant, and peaceful world. Learn more at www.macfound.org.