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Your company's health insurance costs are going down. But yours are going up.

(Shutterstock)

Every month or so, I get the same question in my inbox.

The polite version goes like this: "I've read a lot of your stories about health-care cost growth slowing down. The thing that doesn't make sense to me is, my costs haven't changed at all. My premiums keep going up. How do you explain this?"

Or the less polite version: "Stop lying — my premiums just doubled, and you and the White House are lying liars."

In either form, this really is a vexing question. The country has had four straight years of record-low health-care cost growth since 2009. But most consumers haven't actually seen their own medical spending slow. I feel their pain: earlier this year, my co-pays for specialty care quadrupled. Health-care costs have grown at just about 4 percent for the past four years — so why did I get a 400 percent co-pay hike?

The Center for American Progress published a new report this month that gives the best answer I've seen to this question. It shows that no, the government isn't lying about slower health-care costs — they really are going up slower than they used to. But all those savings? They're not going to you, or me, or other consumers. They're accruing to the rest of the health-care system.

Your company's health insurance costs are going down. But yours are going up.

This is an especially revelatory chart from the CAP report, which shows overall health spending increases for employer-sponsored insurance:

(Center for American Progress)

You can see that something changed in the late 2000s — but only for employers, not employees. "The lines really have been diverging more over the past couple of years," says Topher Spiro, a vice president at Center for American Progress and lead author on the report.

Or, as his study puts it: the divergence "is even more obvious from 2011 to 2012, when employees’ costs increased by 2.1 percent as employers’ costs actually decreased by 0.5 percent."

That's remarkable: employers actually spent less on health care between 2011 and 2012. But at the same time, they asked workers to spend more.

You see this in lots of different types of cost-sharing, particularly deductibles, which have marched steadily upward over the past decade. Even after adjusting for inflation, the CAP analysis finds they have doubled from $1,240 for family coverage in 2002 up to $2,491 in 2013.

cap2

(Center for American Progress)

Most health economists credit this particular trend — higher cost sharing — with helping keep cost growth low over the past few years. When consumers have to pay more of their own health-care bill, they tend to go to the doctor less.

The theory of higher deductibles is that they'll make consumers more cost-conscious. This recent bout of slow health cost growth suggests this theory is right (as does a big, long body of research, too). But consumers don't seem to be reaping the dividends of their cost-conscious decision-making. Those go to the employer rather than the worker.

Workers aren't making up the losses in higher wages

It would be one thing if companies were just shifting the money they used to spend on health care into wages. Employees would have to pay bigger premiums and co-pays, but they'd also have more money in their pockets to cover their expenses.

But the CAP report suggests isn't the case at all: wages are actually going down at the same time that health-care benefits are declining.

Employers have not compensated employees for their rising health care costs with wage increases. In fact, wages fell during this period, further compounding the problem of rising health care costs. Among all families, the median real income actually fell by $5,116 between 2007 and 2013—from $68,931 to $63,815.22* As a result, the average American worker has felt pinched by both stagnating wages and increasing health care costs.

Do workers keep getting screwed? Probably.

Employers offer health insurance for a reason: namely, that it's a valuable benefit that can attract workers. (They also presumably offer it to meet Obamacare's employer mandate, but that's only been true since the start of 2015.)

How far employers can reduce this benefit and still make it attractive to workers isn't totally clear. If the whole employer-sponsored market moves in this direction, companies that pay less for their workers' care won't have a competitive disadvantage.

There's also a possible world in which employers don't bother to offer insurance at all, and move their workers to the Obamacare exchanges. They would have to pay a penalty, but in many cases that would be significantly less than the cost of providing health insurance. So far, though, we're not seeing much evidence of that happening.

These are at least two plausible outcomes for the future of employer-sponsored health insurance. It's less easy to think of a path to a place where the trend reverses, and companies decide to provide more benefits instead of fewer.

Correction: An earlier version of this story described the first chart inaccurately. It refers to all spending on employer-sponsored health insurance, not just premiums.

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