September 27, 2011

Kaiser: Family Health Insurance Cost Rose 9% Nationally

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Annual premiums for employer-sponsored family health coverage across the U.S. increased by nine percent this year, to $15,073, according to a survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust.

On average, workers pay $4,129 for family health coverage and their employers pay $10,944, the survey found. The premiums rose faster than workers’ wages and general inflation in the same period, Kaiser officials said.

“This year’s nine percent increase in premiums is especially painful for workers and employers struggling through a weak recovery,’’ said Drew Altman, president and CEO of the Kaiser Foundation. Altman said federal health reform’s effect on premiums was modest this year because many of its provisions don’t take effect until 2014.

The survey also estimates that employers added 2.3 million young adults to their parents’ health insurance plans as a result of federal health care reform, which allows people up to age 26 without employer coverage to be covered as dependents on their parents’ plan.

Those findings surpass a recent report from the Centers for Disease Control and Prevention and a Gallup poll, which each estimated that the number of uninsured young adults had dropped by 1 million since last year due, in part, to more young people joining their parents’ plans.

“The law is helping millions of young adults to obtain health coverage. In the past, many of these young adults would have lost coverage when they left home or graduated college,’’ said Gary Claxton, lead author of the 2011 Kaiser Employer Health Benefits Survey.

A C-HIT analysis in June found that Connecticut’s private employers have seen the price of health insurance premiums for workers and their families rise 102 percent since 1999. Using 2009 data, it found that families and their employers paid $14,884 in the New Haven/Milford area and $14,251 in the Hartford, West Hartford and East Hartford area.

Ellen Andrews, executive director of the Connecticut Health Policy Project, said more people are requiring health care, and health care prices are continuing to rise, leading to the higher premiums. She said her organization is also concerned that insurance companies may be involved in “profit taking” before more of the federal reforms kick in.

“That’s an obscene amount of money,’’ Andrews said, referring to the $15, 073 average premium found in the survey.

Altman, Kaiser’s CEO, also pointed out that more workers are enrolled in high-deductible health plans, including 28 percent of workers in smaller firms facing deductibles of $2,000 or more.

“To me, this is the quiet revolution going on in health insurance today,’’ he said.

That shift of costs from employers to employees is worrisome, Andrews said.

America’s Health Insurance Plans, a trade group, issued a statement in response to Kaiser’s survey, saying that that in 2010, health plan profits accounted for less than 1 percent of total health care spending in the U.S.

“This report is just the latest warning that far more needs to be done to address the rising cost of health care,’’ the group’s president and CEO, Karen Ignagni, said in a written statement.

“Policymakers in Washington and the states need to focus on all of the factors that are driving premium increases: soaring prices for medical services, changes in the covered population that has resulted in an older and sicker risk pool, and new benefit and coverage mandates that add to the cost of insurance.”

Higher insurance premiums mean people have to make difficult choices, sometimes between buying food or medicine, said Janet Davenport, spokeswoman for the Universal Health Care Foundation of Connecticut.

“Premiums are off the charts,” Davenport said. “It’s a burden for businesses, which pass the burden on to their workers. It’s a vicious cycle.”

State health reform laws passed this year have the potential to protect consumers and control costs, Davenport said. They include a plan to create a “health insurance exchange” or “marketplace” that would offer more Connecticut residents more affordable health-care options, she said.

Kaiser officials called the movement of young people to their parents’ insurance an early success story of federal health reform, and Andrews and Davenport agreed.

“This is a huge success story,’’ Andrews said. “It doesn’t surprise me. This is the most likely age group to be uninsured, so there’s a lot of pent-up demand.’‘

People aged 18 to 25 often work in jobs that don’t offer health insurance, so they go without, Davenport said. Allowing them to stay on their parents’ health insurance plans cuts down on emergency room visits and provides them with better health care, particularly if they have chronic illnesses, she said.

“This is a vulnerable group,’’ she said. “It’s the right thing to do.”

In its 13th year, the national survey was sponsored by the Kaiser Family Foundation and the Health Research & Education Trust. It was conducted between January and May of 2011 and included full responses from 2,088 non-federal public and private firms and partial responses from 1,096 employers.

The foundation, based in Menlo Park, Calif., conducts independent analysis on health policy issues. The trust is a Chicago-based affiliate of the American Hospital Association that collaborates with government, academic and health care agencies in researching health care initiatives.

The Universal Health Care Foundation is a C-HIT funder.

 

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