|September 02, 2010
11 AM EST
From Health Affairs
Family Health Premiums Rise 3 Percent To $13,770 In 2010, But Workers' Share Jumps 14 Percent As Firms Shift Cost Burden
About One In Four Covered Workers Now Face Annual Deductibles Of $1,000 Or More, Including Nearly Half Of Those Employed By Small Businesses
Washington, D.C. - Workers on average are paying nearly $4,000 this year toward the cost of family health coverage -- an increase of 14 percent, or $482, above what they paid last year, according to the benchmark 2010 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET).
The jump occurred even though the total premiums for family coverage, including what employers themselves contribute, rose a modest 3 percent to $13,770 on average in 2010, the survey found. In contrast, the amount employers contribute for family coverage did not increase.
Preferred Provider Organizations (PPOs) continue to dominate the employer market, enrolling 58 percent of covered workers. Average PPO family premiums topped $14,000 annually in 2010
Since 2005, workers' contributions to premiums have gone up 47 percent, while overall premiums rose 27 percent, wages increased 18 percent, and inflation rose 12 percent.
The annual Kaiser/HRET survey provides a detailed picture of private health insurance coverage and costs. The full report and summary of findings from the annual survey of small and large employers will be available today at www.kff.org/insurance/8085/index.cfm. Selected findings will also be published today as a Web First article in the journal Health Affairs at www.healthaffairs.org.
"With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles and other cost-sharing," Kaiser President and CEO Drew Altman, Ph.D., said. "This may be helping to stem the rapid rise in premiums that we saw in the early 2000s, but it also means employer coverage is less comprehensive. From a consumer perspective, the cost of health insurance just keeps going up faster than wages."
Among other plan types, only consumer-driven plans (which are high-deductible plans that also include a tax-preferred savings option such as a Health Savings Account or Health Reimbursement Arrangement) saw growth in their market share. Such plans now enroll 13 percent of covered workers, up from 8 percent last year.
"Consumer-driven plans have clearly established a foothold in the employer market, tripling their market share from 4 percent in 2006 to 13 percent today," said study lead author Gary Claxton, a Kaiser vice president and director of the Healthcare Marketplace Project.
Surprisingly, the survey saw the percentage of firms offering health benefits in 2010 increase sharply to 69 percent, up from 60 percent in 2009, largely because of an increase in the offer rate among firms with 3 to 9 workers. Because most workers are employed by large firms, the shift among the smallest firms did not have a major effect on either the percentage of workers offered health benefits or the percentage of workers covered at their job.
The reason for the large increase in offer rate is unclear. Because of the poor economic climate in 2010, it is unlikely that many firms began offering coverage this year. A possible explanation is that non-offering firms were more likely to fail during the past year, with the attrition of non-offering firms leading to a higher offer rate among surviving firms.
Other findings from the survey include:
Now in its 12th year, the survey is a joint project of the Kaiser Family Foundation and the Health Research & Educational Trust. The survey was conducted between January and May of 2010 and included 3,143 randomly selected, non-federal public and private firms with three or more employees (2,046 of which responded to the full survey and 1,097 of which responded to a single question about offering coverage). A research team at Kaiser and HRET conducted and analyzed the survey, led by Kaiser's Gary Claxton and including researchers at the National Opinion Research Center (NORC) at the University of Chicago (working on the project under contract to HRET). For more information on the survey methodology, please visit the Survey Design and Methods Section at http://ehbs.kff.org.
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The Kaiser Family Foundation is a non-profit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible analysis and information on health issues.
Founded in 1944, the Health Research & Educational Trust (HRET) is a private, not-for-profit organization involved in research, education, and demonstration programs addressing health management and policy issues. An affiliate of the American Hospital Association (AHA), HRET collaborates with health care, government, academic, business, and community organizations across the United States to conduct research and disseminate findings that shape the future of health care. For more information about HRET, visit www.hret.org.
|About Health Affairs|
Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears each month in print, with additional Web First papers published weekly at http://www.healthaffairs.org/. The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.