Study Finds Sharp Rise In Health Insurance Costs
A new study by the Kaiser Family Foundation confirms the success of Obama’s health care overhaul in insuring millions of young adults, but it also reflects the need for further changes to the health insurance system as premiums are increasing much faster than workers’ wages.
After several years of relatively modest premium increases, annual premiums for employer-sponsored family health coverage increased to $15,073 this year, up 9 percent from last year, according to the Kaiser Family Foundation/Health Research & Educational Trust 2011 Employer Health Benefits Survey released today. On average, workers pay $4,129 and employers pay $10,944 toward those annual premiums.
Premiums increased significantly faster than workers’ wages (2.1 percent) and general inflation (3.2 percent). Since 2001, family premiums have increased 113 percent, compared with 34 percent for workers’ wages and 27 percent for inflation.
“This year’s nine percent increase in premiums is especially painful for workers and employers struggling through a weak recovery,” Kaiser President and CEO Drew Altman, Ph.D. said.
According to Maulik Joshi, Dr.P.H., president of HRET and senior vice president for research at the American Hospital Association, “survey findings related to the impact of early provisions in health reform provide valuable insight for employers, providers, consumers, and policymakers as they prepare for additional provisions to take effect by 2014.”
The 13th annual Kaiser/HRET survey of small and large employers provides a detailed picture of trends in private health insurance costs and coverage. This year’s survey also looked at employers’ experiences with several already implemented provisions of the 2010 health reform law affecting employer coverage.
In particular, the survey estimates that employers added 2.3 million young adults to their parents’ family health insurance policies as a result of the health reform provision that allows young adults up to age 26 without employer coverage on their own to be covered as dependents on their parents’ plan. Young adults historically are more likely to be uninsured than any other age group.
“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 study lead author Gary Claxton, a Kaiser vice president and co-executive director of the Kaiser Initiative on Health Reform and Private Insurance.
The Obama Administration responded to this report by saying that the premiums will not be as expensive once more provisions of Obama’s health care overhaul are implemented. Nancy-Ann DeParle, the assistant to the president and deputy chief of staff, said, “Key Affordable Care Act policies are starting to take effect that make insurance more affordable. For example, insurance companies that want to raise premiums for 2012 by more than 10 percent will have to publicly justify their rate hikes. And a growing number of states have the power to reject unjustified premium hikes.” She also pointed out that the health care reforms have already helped millions, and that the data provides further evidence that Obama’s efforts are necessary.
“The Kaiser report is informative, but it’s a look backwards,” according to DeParle’s statement. “When we look to the future, we know that the Affordable Care Act will help make insurance more affordable for families and businesses across the country.”