New survey shows dramatic increase in employer-sponsored health insurance rates
The average cost of employer-sponsored health insurance has increased 9 percent for family coverage and 8 percent for individual coverage since last year, a new study by the Kaiser Family Foundation and the Health Research & Education Trust shows. “Both increases are the largest since 2005,” Tony Pugh of McClatchy Newspapers writes, surpassing the national 2 percent increase in wages and 3.2 percent increase in inflation.
Since 2001, family coverage premiums have escalated 113 percent while workers’ wages have only risen 34 percent and inflation – 27 percent, Pugh reports. Researchers are unclear if the increase in premiums is temporary or whether higher increases will continue. “We really don’t know, and we won’t know until next year,” Drew Altman, president and CEO of the Kaiser Family Foundation told Pugh.
Employers pay on average about 72 percent toward family coverage and 82 percent for single coverage, Pugh reports, leaving workers paying 28 percent for family and 18 percent for single coverage. Of those surveyed, about 31 percent of covered workers were in high-deductible plans, a 10 percent increase from 2006.
Increasing costs in medical care is “the main culprit behind the rate increases,” Karen Ignagni, president of America’s Health Insurance Plans told Pugh. “Insurers’ expectation of stronger economic recovery” and insurers’ fears of increased costs from the 2010 Affordable Care Act may be driving higher premiums, Pugh reports.
Despite insurers’ fears, an analysis by Kaiser and the federal government suggest that the 2010 Affordable Care Act accounts for only 1 to 2 percentage points of the increase. Only two measures, coverage of adult children to age 26 and no patient cost-sharing coverage on certain preventive medical services, were implemented thus far with the remaining provisions taking effect in 2014, Pugh reports. This month, insurers will be required to publicly disclose information about rate increases of 10 percent or more for review by state or federal officials to determine if the increase is warranted. (Read more)