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Health-insurance premiums rise 13.9 percent
Kent Hoover
Health-insurance premiums jumped 13.9 percent this year, the biggest increase since 1990 and the third consecutive year of double-digit percentage increases, according to a survey by the Kaiser Family Foundation and Health Research and Educational Trust.
Most employers are keeping coverage, but passing on increased costs to employees, the survey found. The average premium employees pay for family coverage has increased almost 50 percent in the past three years, from $1,619 to $2,412. The typical family health insurance policy now costs $9,068, with employers picking up 73 percent of the cost.
Premiums averaged $3,383 for single coverage, according to the survey, which was based on surveys of businesses ranging in size from three to more than 300,000 employees.
A third of the employers reported changing carriers or plan types, and 17 percent of large companies now offer a lower-cost high-deductible plan to their employees.
Small businesses once again were hit with bigger rate increases than large employers. Premiums for businesses with fewer than 200 employees faced an average premium increase of 15.5 percent.
Kate Sullivan, director of health-care policy for the U.S. Chamber of Commerce, said this disproportionate impact on small businesses demonstrates why Congress should pass legislation that would allow national trade associations to offer health plans that would be exempted from state regulations and mandates.
"While employers of all sizes continue to shop around for coverage options as costs rise, small employers do not have alternatives in the marketplace to which they can change," Sullivan said.
Most employers cited higher prescription drug spending as the leading contributor to premium increases, followed by higher spending on hospital services.
But Jon Gabel, vice president for health system studies at HRET, said, "Premiums rose faster than underlying health-care costs, and this enabled insurers to improve their profitability."
Meanwhile, preliminary findings from a survey of health insurers by the Segal Co. indicate that costs for most types of health plans will increase at slightly lower rates next year, but still in double digits.
"These findings may signal a flattening of hyperinflation experienced for several years," the benefits consulting firm reports. "Nevertheless, it is worth noting that cost trend rates are still three to five times the rate of the general consumer price index."