Brace yourself, because the average cost of employer-provided health coverage passed $20,000 for a family plan this year, according to a new survey by the Kaiser Family Foundation.

Premiums rose 5% to $20,576 for the employer-provided plans in 2019. On average, 71% of that cost is borne by the businesses while the rest is paid by the employee.

But why is this number such a milestone? As economist Drew Altman told WSJ: “It’s the cost of buying an economy car, but buying it every year.”

Though employers still bear a larger percentage of the overall cost of health-insurance plans, costs for families rose even more swiftly than costs for employers this past year, with an 8% jump (to $6,015 a year). Singletons fared slightly better: Premiums for the individual plans increased by just 4% (to $7,188).

The disappointing fact is that, for many companies, a 5% annual increase in health-benefit-related costs isn’t new, according to WSJ. And some firms are instituting new policies, like a $250 penalty for employees who get imaging scans without checking a price-transparency system.

At Elkay Manufacturing Co., a closely held company in Oak Brook, Ill., with around 1,500 US employees, the cost of coverage has been going up around 5% to 6% a year, said Carol Partington, senior manager of total benefits. For 2019, the company introduced its first high-deductible plan, and put in place a new $250 penalty for employees who get imaging scans without checking prices through a price-transparency program.  

Elkay, which makes products including sinks and faucets, and does interior design work, tries to keep workers’ share of health costs at roughly 20%, with the company bearing the rest, Ms. Partington said.

“If our costs go up, theirs is going to go up in that same proportion.”

And another trend: The rising cost of employee health benefits continued to exceed inflation and wage growth, according to the Kaiser foundation, squeezing workers despite a low unemployment rate, which should, in theory, press companies to raise wages and sweeten benefit packages.

“For some workers, employer-based coverage isn’t such a great deal,” because of the high costs they have to bear, said Gary Claxton, a senior vice president of the Kaiser foundation.

At companies that employ a lot of low-wage employees, the low-wage earners are often forced to shoulder a larger percentage of their health-care costs.

But why is this stat so important to the election cycle? As one political expert said, health-care policy is playing a big role in the Democratic debates thanks to the party’s embrace of Bernie Sanders’ Medicare for All (“M4A”) plan.

“Health-care affordability is generally the No. 1 issue for voters,” said Dan Mendelson, a founder of a health-care consulting firm and former federal official who is now an operating partner at a private-equity firm. “The issue is the costs that consumers actually see, including deductibles, co-pays and the cost of prescription drugs.”

Remember: Joe Biden has endorsed a plan that would effectively create a public option by letting consumers buy into Medicaid.

Though Democratic Socialists like to complain about the immense profits that the health-care industry is raking in, the biggest driver of these higher insurance costs is simply the rising price that insurers and employers pay for health care.

“The vast majority of this can be explained by prices,” particularly for hospital care, said Niall Brennan, chief executive. Consolidation by hospital systems has in many cases given them a larger share of their local markets, which “enables them to engage in pretty unconstrained pricing behavior,” he said.

A report published earlier this year from the Health Care Cost Institute found that between 2013 and 2017, average health care prices increased 17.1%, while health-care utilization declined 0.2%.

Of course, this number might also benefit President Trump, too; it’s just one more thing that he can blame on Obama.

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