The rising cost of health care is cutting into other business budgets, including payroll and hiring.
A survey of employers by the Healthcare Purchaser Alliance of Maine shows that rising health care costs are affecting wage growth, hiring practices and the long-term viability of employee health care coverage.
The survey, with responses from more than 100 Maine-based companies in a range of sectors, found that 95% of respondents believe working Mainers find it difficult to afford health care. Additionally, 93% expressed support for state legislative action to address cost drivers.
“This survey quantifies the challenges we hear about in our daily conversations with Maine businesses,” said Trevor Putnoky, CEO of the Healthcare Purchaser Alliance. “Employers want to provide competitive benefits to attract and retain talent, but the rising cost of coverage is making it increasingly difficult to do so.”
The cost of health care premiums is directly affecting other areas of employee compensation, the survey found. Within the past three years:
- 29% of employers have limited wage increases to offset increased health care costs
- 22% have reduced hiring due to rising premiums
- 87% of employers currently offering insurance expressed concern regarding the current cost trajectory.
Looking ahead
Looking to the road ahead, two-thirds of respondents said they are not confident they can maintain existing benefit levels over the next five years.
A vast majority of respondents, 93%, said they’d back a state policy that would help cap costs. In open-ended feedback, employers emphasized the need to balance price-focused policies with maintaining health care quality and access.
Some respondents also identified other factors contributing to premium growth, including the role of insurance carriers.
“Employers are working tirelessly in-house to seek out solutions each year,” noted one Maine employer in the survey. “It’s imperative that systemic change, specifically at the level of legislation, start, as we can’t rely on the ways we have been operating to solve affordability issues.”
The survey also asked employers how they would apply savings if health care costs were reduced. More than half, 53%, said they would lower employee premium contributions, while 44% would allocate savings toward increased wages or bonuses.
