Average Cost of Employer Health Plan Up 5%: Survey

The average cost of an employer-provided family plan is now $13,375, up 5 percent from 2008, according to a new report by the Kaiser Family Foundation and Health Research & Educational Trust.

USA Today: "An average family health insurance policy now costs more than some compact cars, and four in 10 companies will likely pass more of that expense on to workers." The increasing costs "underscore warnings by President Obama about the growing cost of health insurance and were embraced by Democratic lawmakers who are pushing for legislation to change the nation's health care system. ... The annual survey of more than 2,000 companies also found that 40% of small-business employees enrolled in individual health plans pay annual deductibles of $1,000 or more. That's almost twice the number who paid that much in 2007" (Fritze, 9/16).

Kaiser Health News: "The 5 percent increase in employer-sponsored health insurance costs for family coverage is less than the double-digit growth in premiums earlier this decade but was sharply higher than overall inflation, which dropped 0.7 percent this year, mostly due to declining energy prices. ... Paul Fronstin, senior research associate at the Employee Benefit Research Institute, said that 'employers see raising deductibles as the easiest way to control costs.' The higher deductibles are one reason why premiums have been going up more slowly in recent years. 'It's a crude instrument, but it does the job,' he said" (Galewitz and Villegas, 9/15).

The Washington Post: "Forty percent of employers surveyed said they are likely to increase the amount their workers pay out of pocket for doctor visits. Almost as many said they are likely to raise annual deductibles and the amount workers pay for prescription drugs. Nine percent said they plan to tighten eligibility for health benefits; 8 percent said they plan to drop coverage entirely. Forty-one percent of employers said they are 'somewhat' or 'very' likely to increase the amount employees pay in premiums -- though that would not necessarily mean employees would pay a higher percentage of the premiums. Employers could simply be passing along the same share of the overall increase that they are doing this year" (Hilzenrath, 9/16).

The Philadelphia Inquirer: "Responses to a separate telephone survey of 1,250 adults that was conducted in July showed slightly more people were worried about not being able to afford needed medical care than about paying their mortgages or losing their jobs." (Burling, 9/16).

The Boston Globe: Major health insurers in Massachusetts "plan to raise premiums by about 10 percent next year, prompting many employers to reduce benefits and shift additional costs to workers. Increases will range from 7 to 12 percent, capping a decade of consecutive double-digit premium increases, according to a Globe survey of the state's top health insurers. Actual rates for 2010 will depend on the size of the employer and the type of coverage, with small businesses and individuals expected to be hit hardest. Overall, premiums are more than twice as high as they were 10 years ago.

"The higher insurance costs undermine a key tenet of the state's landmark health care law passed two years ago, as well as President Obama's effort to overhaul health care. In addition to mandating insurance for most residents, the Massachusetts bill sought to rein in health care costs. With Washington looking to the Massachusetts experience, fears about higher costs have become a stumbling block to passing a national health care bill." (Weisman, 9/16).

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BusinessWeek: "The Business Roundtable, which represents CEOs from the largest U.S. companies, warned in a report released Sept. 15 that annual health-care costs for businesses will rise 166% over the next decade, to nearly $29,000 per employee, if Congress does not enact significant coverage and cost reforms." But "the Roundtable is not keen on several of the proposals coming out of Washington, and in a press briefing its members made it clear they are not willing to support the creation of a government-financed insurer, i.e., the so-called 'public plan,' as contained in a House bill" (Arnst, 9/15).

The Wall Street Journal: "Business groups that have opposed House versions of a health bill say they are warmer toward the version emerging from Sen. Max Baucus's Finance Committee, which places less-onerous requirements on employers. - The House version of the health legislation would require some employers to pay as much as 8% of payroll as a fine if they don't offer coverage to workers. Under the Senate Finance measure, employers who decline to provide coverage would face a smaller penalty, and in narrower circumstances." But employers are still concerned that "a provision to tax insurance companies on generous health-insurance benefits could get passed onto employers. Some groups also say the Senate proposal doesn't go far enough to lower overall health-care costs" (Adamy, 9/16).

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Source-Kaiser Health News
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