Employer Insurance Costs Rising for Workers12/02/10
THURSDAY, Dec. 2 (HealthDay News) -- Although premiums for
employer health insurance have risen 41 percent since 2003, new
research says that employees are getting less bang for their
In addition, individual deductibles have skyrocketed 77 percent,
according to the report from The Commonwealth Fund.
"Health insurance has become increasingly unaffordable for families during the years before enactment of the Affordable Care Act," Commonwealth Fund President Karen Davis said during a Tuesday afternoon press conference.
"During that time, benefits were scaled back as employers and workers struggled to keep up in a difficult economy," she said. "The new law provides us with the opportunity to reverse these unsustainable increases and ensure that families in every state have access to affordable, comprehensive health insurance."
The report says that if costs continue to rise at the same pace
as they did from 2003 to 2009, annual premiums shared by employers
and employees would increase 79 percent, costing an average family
$23,342 by 2020.
However, if health care reform can slow increases by 1 percent,
family premiums would be $2,323 lower by 2020. Slowing premium
growth by 1.5 percent would mean $3,403 in savings, according to
The increases in premiums from 2003 to 2009 varied from state to
state, ranging from a 21 percent increase in Delaware to a 59
percent increase in Louisiana.
In 2009, insurance premiums were highest in Alaska, Connecticut,
Massachusetts, Vermont, Wisconsin and Wyoming, with family premiums
of more than $14,000 a year.
The states with the lowest premiums included: Alabama, Arkansas,
Hawaii, Idaho, Kansas, Montana, North Dakota, Ohio, Oklahoma, South
Dakota and Utah, which ranged from $11,000 to $12,000 a year in
2009, the report found.
Deductibles rose in almost all states during the same period,
increasing an average of 77 percent. In addition, more workers are
paying deductibles. In 2009, 74 percent paid deductibles, compared
with 52 percent in 2003, according to the report.
Health insurance premiums have been going up three times faster
than average incomes. By 2009, total premiums equaled or exceeded
18 percent of household income for workers in 26 states, which is
up from three states in 2003.
No state's premiums were less than 14 percent of income in 2009,
the report found.
These increases hit families in the South-central and Southern
states the hardest, where premiums are high and incomes generally
lower than the national average, the report said.
"For many, health insurance has simply become unaffordable," report author and Commonwealth Fund Vice President Cathy Schoen said during the press conference.
The report said many of these problems may be alleviated by
provisions of the Affordable Care Act, signed into law by President
Barack Obama in March, since:
- Restrictions on administrative costs will direct more premium
dollars to medical care.
- States have the authority to review and question unreasonable
- States can exclude insurers from the health insurance exchanges
if they have a pattern of unreasonable premium increases.
- Beginning in 2014, health insurance exchanges will help assure
employees and small employers that insurance plans include benefits
and protection against high medical bills.
- Starting in 2014, more affordable health insurance plans will
be available to low- and moderate-income families and include
federal premium credits to help buy insurance and expand Medicaid
coverage to low-wage workers and their families.
- System reforms will provide dollar incentives to doctors and
health systems to give better care and reduce waste and
The new report, released Thursday, is titled
State Trends in Premiums and Deductibles, 2003-2009: How
Building on the Affordable Care Act Will Help Stem the Tide of
Rising Costs and Eroding Benefits.
For details on the Affordable Care Act, visit
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