Family health costs jump 5%

New survey finds workers and employers are paying more for health insurance this year than last, and substantially more than they did 10 years ago.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Jeanne Sahadi, CNNMoney.com senior writer

chart_healthcare_inflation2.03.gif
How have your health care costs changed in the past few years?
  • They've risen a lot
  • They've risen a little
  • They're about the same
  • They're down

NEW YORK (CNNMoney.com) -- Despite a drop in inflation, the annual cost of employer-sponsored family health insurance coverage has risen 5% this year to $13,375, according to a new survey released Tuesday.

Employers picked up the lion's share of that tab. Companies paid an average of $9,860, while their workers picked up the other $3,515, according to the 2009 survey of employers from the Kaiser Family Foundation and Health Research & Educational Trust. Kaiser is a nonprofit, nonpartisan health policy research foundation.

For individual coverage, annual premiums rose more modestly, up an average of 2.6% to $4,824. But those increases came as prices fell roughly 1% this year because of the recession.

Over the past decade, the annual cost of family coverage has risen 131% and the annual cost for single coverage is up 120%, according to Kaiser. In each of the past 10 years, insurance increases have outpaced inflation -- sometimes by as much as 11 percentage points.

"When health care costs continue to rise so much faster than overall inflation in a bad recession, workers and employers really feel the pain," said Kaiser president and CEO Drew Altman in a statement.

Even though companies pay far more of health insurance premiums than their employees, many economists note that increases to the employer portion of health costs reduce workers' wages over time. This year, workers' wages have risen 3.1%, according to the Kaiser survey.

In response to the economic downturn, 22% of large employers and 21% of small employers offering health insurance to workers said they reduced the cost of health benefits or increased how much their workers had to pay through deductibles and co-payments.

The same percentage of large employers and 15% of small companies said they increased their workers' share of the premiums.

And 42% of all firms said they are likely or somewhat likely to increase what workers pay in premiums next year, while more than 35% said they would increase deductibles or worker copayments and share of drug costs.

According to the survey, more than 20% of workers with employer-sponsored insurance plans must pay $1,000 in deductibles for individual coverage before their insurance policy kicks in. That's up from 10% in 2006.

The survey comes during one of the most pivotal weeks in the health reform debate, as Senate Finance Committee Chairman Max Baucus, D-Mont., prepares to release a much-awaited reform bill worked on -- although not always supported -- by a bipartisan group of senators. Whether that bill can generate bipartisan support among the broader committee and others in the Senate is still an open question.

But one idea that has generated support among many in both parties is that any reform should be built around the employer-sponsored insurance system, which currently insures the majority of Americans. Efforts to curb costs within that system remains one of lawmakers' -- and employers' -- biggest challenges.

If health care costs continue to grow at an average annual rate of 8.7% -- which they did over the past 10 years -- Kaiser estimates the annual premium cost for employer-based family coverage will top $30,000 by 2019.

"There's no reason to believe we've done anything meaningful to address the fundamental drivers of health care costs," Altman said in a conference call with reporters.

Should health reform take place and should it succeed in reducing costs the long-term trend could be altered, he said, but cost containment won't be immediate. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
8 must-have travel apps Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More
Hot stocks: 10 record breaking companies The S&P 500 is trading at all-time highs, and many well-known businesses are leading the charge. Time to buy or sell? More
My biggest retirement mistake Five CNNMoney readers share stories about saving that you can learn from. What they would do differently if they had another chance. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.