| Health Insurance Premiums Soar, Outpacing Wages
Consumers paid more of the costs of their health
premiums last year, even as wages rose modestly and inflation slowed.
And things aren’t getting better in 2010.
Premiums for employer-sponsored health insurance rose to
$13,375 annually for family coverage in 2009 – with employees on
average paying $3,515 and employers, paying on average $9,860,
according to the 2009 Employer Health Benefits Survey, a joint project
of the Kaiser Family Foundation (KFF) and the Health Research &
Educational Trust (HRET).
Family premiums rose about 5 percent more than general
inflation, which fell 0.7 percent during the same period, mostly due to
falling energy prices. Worker wages increased 3.1 percent during the
same period.
"The joint survey results demonstrate the need for
comprehensive, meaningful [healthcare] reform," said Maulik S. Joshi,
Drip, DrPH president of HRET. "Our nation faces a unique opportunity to
achieve reform and build a better health care system that improves care
for patients and provides coverage for all at an affordable cost."
Since 1999 health insurance premiums have risen a total
of 131 percent, far more rapidly than workers’ wages, up 38
percent, or inflation, 28 percent. Premium increases have risen more
slowly during the past few years, compared to the double-digit growth
earlier this decade.
PPOs continue to dominate the employer market, enrolling
slightly more than 6 in 10 covered workers. HMOs cover 20 percent of
workers, with an additional 10 percent in point-of-service plans. Eight
percent are enrolled in consumer-directed plans or high-deductible
plans that also include a tax-preferred savings options, such as a
health savings account or health reimbursement arrangement.
The smaller the company the less likely it was to offer
health benefits, the survey found. Fewer than half, 46 percent of the
smallest employers, employing 3-9 workers, offered health benefits.
Among those businesses offering benefits, 21 percent
said they reduced the scope of health benefits or increased cost
sharing due to the economic downturn, and 15 percent said they
increased the worker’s share of the premium.
The survey found that a growing number of workers
covered by their employers faced high deductibles in their plans, as
well as contributing more to the premiums for their coverage. In 2008,
22 percent of covered workers paid at least $1,000 out-of- pocket
annually for single coverage before their plan generally started to pay
a share of their healthcare bills, up from 18 percent in 2007.
When asked about their plans for 2010, 21 percent of
businesses offering coverage said they were "very likely" to raise
workers’ premium contribution, and 16 percent said they were
"very likely" to raise deductibles. Just 4 percent said they were "very
likely" to restrict eligibility for coverage while 2percent said they
were "very likely" to drop health coverage altogether.
The survey included 3,188 randomly selected, non-federal
public and private companies with three or more employees – 2,054
of which responded to the full survey and 1,134 of which responded to a
single question about offering coverage.
Other findings from the survey include:
- Drug benefits. The vast majority of covered
workers face a three- or four-tier system to determine their
cost-sharing for drugs. For workers in such plans, the average
co-payments last year was $10 for first-tier drugs, $27 for second-tier
drugs, and $46 for third-tier drugs. Co-payments for fourth-tier drugs,
which may include costly biological agents and lifestyle drugs,
averaged $85.
- Office visits. Among covered workers with a
co-payment for in-network physician office visits, the average
copayment was $20 for primary care and $28 for specialty physicians
– up slightly from the 2008 averages.
- Wellness benefits. More than half (58 percent)
of employers offering health benefits offer at least one of the
following wellness programs: weight loss program, gym membership
discounts or on-site exercise facilities, smoking cessation program,
personal health coaching, classes in nutrition or healthy living,
Web-based resources for healthy living, or a wellness newsletter.
- Health risk assessments. Among firms offering
coverage last year, 16 percent gave their employees the option of
completing a health risk assessment to help employees identify
potential health risks. Within this group, 11 percent offered financial
incentives such as lowering the worker’s share of premiums or
offering merchandise, gift cards, travel, or cash to their workers.
Large firms were more likely than small firms both to offer assessments
and to offer financial incentives.
- Onsite health clinics. Among very large firms
(at least 1,000 workers), 20 percent reported that they had an on-site
health clinic for employees at one or more locations. Of those firms
with an on-site health clinic, 79 percent reported that employees could
have received treatment for non-work related illness at the clinic.
- Retiree benefits. Last year 29 percent of
large firms (200 or more workers) that offered health coverage also
offered retiree health benefits, similar to the 31 percent who did so
in 2008 but less than half the 66 percent who did so in 1988.
Addresses: Kaiser Family Foundation, 1330 G Street NW, Washington DC 20005; (202) 347-5270, www.kff.org. Health Research & Educational Trust, One North Franklin, 30th Floor, Chicago, IL 60606; (312) 422.2600, www.hret.org.
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