Thursday, September 25, 2008 Health
Care Marketplace
Employer-Based Premiums for Family Health Coverage
Rise by 5% to $12,680 in 2008; Many Workers Also Face Higher
Deductibles, Survey Finds
Employer-sponsored health insurance
premiums for family coverage increased by an average of 5% in 2008 to
$12,680, with more workers enrolled in high-deductible health plans,
according to the 2008 Employer Health Benefit survey released on Wednesday
by the Kaiser Family Foundation
and Health Research
and Educational Trust, McClatchy/Miami Herald reports (Pugh,
McClatchy/Miami Herald, 9/24). Premiums have more than
doubled since 1999 when annual premiums for family insurance averaged
$5,791 (Fuhrmans, Wall Street Journal, 9/24).
Between
January and May, 2,832 randomly selected, non-federal public and private
firms with three or more employees were surveyed by telephone (Yee, Minnesota Star Tribune, 9/25). Of those
surveyed, 1,927 companies responded to the full survey and 905 responded
to a single question about offering coverage. Key findings of the survey
also were published in the journal Health Affairs (Kaiser
Family Foundation/HRET/Health Affairs joint release,
9/24).
Premiums, Coverage and Deductibles
Annual premiums for
employer-sponsored family coverage averaged $12,680 in 2008, with
employees contributing $3,354 of that cost (Colliver, San Francisco Chronicle, 9/25). Workers at
small businesses -- those with between three and 199 employees -- pay
$4,101 toward premiums annually for family coverage, compared with $2,982
for workers at larger firms. For single coverage, workers on average at
small firms pay $624 annually, compared to $769 for single coverage at
larger firms (Kaiser Family Foundation/HRET/Health Affairs
joint release, 9/24). The survey found that 99% of large companies offer
health benefits, compared with 62% of those with less than 200 workers and
49% of those with between three and nine workers (Freking, AP/South Florida Sun-Sentinel, 9/24).
Forty-eight percent of the smallest firms that did not offer benefits
cited high premiums as the most important reason (Kaiser Family
Foundation/HRET/Health Affairs joint release,
9/24).
The portion of workers with deductibles of at least $1,000
increased from 12% in 2007 to 18% in 2008, according to the study (Miller,
Atlanta Journal-Constitution, 9/25).
Thirty-five percent of workers at small companies have health plan
deductibles of at least $1,000 this year, up from 21% last year (Appleby,
USA Today, 9/25). For workers in
employer-sponsored preferred provider organizations -- the most common
type of coverage -- deductibles increased by nearly $100 to $560 in 2008.
The overall rise in deductibles can partly, but not entirely, be
attributed to the rise in consumer-driven plans, such as those that
qualify for a companion health savings account.
Consumer-Driven Health Plans
The portion of workers enrolled
in consumer-driven health plans increased from 5% last year and 4% in 2006
to 8%, or 5.5 million workers, in 2008, the survey found. Of those
enrolled in consumer-driven plans, 3.2 million are in plans that qualify
for the establishment of HSAs and 2.2 million are in plans that use a
health reimbursement arrangement (Kaiser Family
Foundation/HRET/Health Affairs joint release, 9/24). The
average deductible for consumer-driven plans is $2,010 for single coverage
for HSA-qualified plans and $1,552 for HRAs.
The increase in the
number of workers enrolled in consumer-driven health plans was driven
largely by small businesses, where the percentage of workers in these
plans increased to 13% from 8% last year. In companies with more than 200
employees, 5% are enrolled in such plans -- statistically unchanged from
2007 (Carey, CQ HealthBeat, 9/24). Companies on average
pay a total of $8,291 annually toward family coverage in an HSA-qualified
plan, including a $1,522 contribution to the account, compared with $9,495
paid toward family coverage in non-consumer-directed plans (Kaiser Family
Foundation/HRET/Health Affairs joint release, 9/24). Sixty
percent of firms offering such plans say the main reason is cost, and more
than 40% reported cost savings as the most successful result of the plans
(Carey, CQ HealthBeat, 9/24).
Additional Results
The survey also found that:
- More than half of all companies offering
coverage also provide at least one of seven wellness programs, including
weight loss programs, gym membership discounts or an on-site exercise
facility, smoking cessation programs, personal health coaching, classes
in nutrition or healthy living, Web-based resources for health living,
or a wellness newsletter (Powell, Akron Beacon Journal, 9/25);
- Most plans have a three- or four-tier system
for determining the amount workers pay for prescriptions. The average
copayment is $10 for the first tier, $26 for the second tier, $46 for
the third tier and $75 for the fourth tier, which can include costly
biological agents and lifestyle drugs (Kaiser Family
Foundation/HRET/Health Affairs joint release,
9/24);
- When asked about plans for the coming year, 14%
of companies say they are "very likely" to raise workers' premium
contributions, and 12% say they are "very likely" to restrict
eligibility for coverage or eliminate coverage altogether
(McClatchy/Miami Herald, 9/24); and
- 31% of large companies offered retiree health
benefits in 2008 -- similar to last year but less than half of the 66%
that did so in 1988 (Stafford, Kansas City Star, 9/24).
Comments
Kaiser Family Foundation President and CEO Drew
Altman said, "The problems people are having paying for health care and
health insurance are a central dimension of the economic pocketbook
concerns right now" (Abelson, New York Times, 9/24). He added, "We may be
seeing the tip of the iceberg of a trend towards less comprehensive,
skimpier insurance with higher out-of-pocket payments for working people.
That's bad news at a time when workers are being hit by other economic
pressures from declining 401(k)s to higher food and gas prices and
problems paying the rent and mortgage" (McClatchy/Miami
Herald, 9/24). "I do think part of it is that we're in a period
where people are paying more of the bill and also at the same time are
being hit with other economic shocks," he said, adding, "That curbs their
use of health care" (Manthey, Arkansas Democrat-Gazette, 9/25). The
proposed bailout of Wall Street firms could affect the chances that
federal action will be taken to overhaul the health coverage system,
according to Altman. He said, "The bailout makes it so much tougher" (Von
Bergen, Philadelphia Inquirer, 9/25).
In a
release, HRET interim President John Combes said, "Even modest growth in
premiums and deductibles can result in financial challenges for many
working families, particularly when coupled with high food and gas prices
in 2008."
Survey co-author Gary Claxton, a Kaiser Family Foundation
vice president and director of the Foundation's Health Care
Marketplace Project, said, "It's possible that the premiums aren't
reflecting what they think their actual costs are at the moment," adding,
"There's going to be a little bit of pressure on them probably to raise
premiums to do something about their revenues." According to Claxton,
"We're at a time when health care plans have been competing for market
share," and recently "we haven't seen any new blockbuster drugs that are
paid for by insurance" (Arkansas Democrat-Gazette,
9/25).
The survey "makes it clear the cost of doing nothing is high
and growing," Len Nichols, a health economist at the New America Foundation,
said (New York Times, 9/24).
America's Health Insurance
Plans President Karen Ignagni said that "the slowing rate of growth in
health insurance premiums shows we are moving in the right direction, but
much more needs to be done to make health care coverage more affordable
for consumers and employers."
House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) said,
"Unless we enact significant reforms, people will continue to fall through
the cracks of insurance company rules, employers will continue to drop
coverage, and out-of-pocket costs will continue to rise faster than wages.
Until we have universal coverage, these cost shifts away from insurers to
consumers will continue" (Carey, CQ HealthBeat,
9/24).
The
Kaiser Family Foundation/HRET survey is available online.
HSC Study
In related news, a study released by the Center for Studying Health
System Change, based on a nationwide survey of households, found that
nearly one in five families had problems paying medical bills last year.
More than half of those families said they borrowed money to pay health
care expenses, and almost 20% of those having trouble paying said they
considered declaring personal bankruptcy as a result, according to the
study (New York Times, 9/24). The study found that 57 million
U.S. residents are in families that struggle to pay medical bills, and
42.5 million of those people have health insurance.
Peter
Cunningham, an HSC senior fellow, said, "Increases in problems paying
bills are affecting not only those who have always struggled with medical
costs -- low-income and uninsured people -- but also an increasing number
of insured middle-income families" (Jha, CQ HealthBeat,
9/24). Karen Davis, president of the Commonwealth Fund,
which funded the study, said, "It's hitting both the insured and the
uninsured, and it's hitting middle-class families" (New York
Times, 9/24).
The HSC
study is available online.