The cost of health care insurance premiums is on the rise again after several years of moderate growth, the Kaiser Family Foundation and the AHA's Health Research & Educational Trust announced Tuesday with the release of their annual Employer Health Benefits Survey. In 2011, premiums for a family policy rose 9 percent to slightly over $15,000 for the first time.
So why, after a relatively stable period of growth dating back to 2006 that crested in 2010 with a 3 percent increase, are premiums up sharply? The report didn't directly address that issue, but in a media call, Kaiser Family Foundation President and CEO Drew Altman said he believes part of the reason is that insurers expected an increase of health care utilization this year, in tandem with a stronger projected economy. While the economy hasn't improved — and actual utilization has remained flat — the increases are already on the books, Altman noted.
"[Insurers] pegged their premiums this year to an expectation of utilization that didn't play out because recovery sputtered," Altman said. "… If I had to guess, I would guess next year's increase would be lower. Recovery has slowed and utilization is back down."
Other factors include pieces of the Affordable Care Act that have recently been implemented, including provisions that cover young adults under 26 under their parents' plans and require insurers to offer more preventive services without co-pays to customers. Altman estimated that those provisions may have contributed to an overall increase in premiums of only 1 to 2 percentage points. The survey estimates that employers added roughly 2.3 million young adults to their family's insurance plan as a result of the changes.
Meanwhile, the percentage of employers offering health benefits fell to 60 percent from 69 percent in 2010, or closer to where that number has been in the last several years, HRET president Maulik Joshi noted during the call.
"The survey is finding that health insurance benefits are returning to levels prior to 2010," Joshi said.
The survey also reports a major shift in the nature of health insurance being offered, as more employers opt for plans that include higher deductibles for employees. All told, 31 percent of workers with insurance have annual deductibles of at least $1,000; 12 percent must pay $2,000 deductibles. Higher deductibles are disproportionately found at companies with fewer than 200 employees, the survey found.
Other interesting factoids:
- 55 percent of workers with insurance have Preferred Provider Organization plans, better known as PPOs. 17 percent use HMOs, 10 percent have point of sale insurance and 17 percent are enrolled in a high-deductible plan with a health savings account option.
- The number of large firms offering benefits to retirees has declined from 66 percent back in 1988 to 26 percent today.
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Haydn Bush is senior online editor for Hospitals & Health Networks magazine.