Health Insurance Premiums Up 11%, Employees Could Pay More

For the first time since 1992, inflation for employer health care costs "broke into double digits," increasing 11%, "a sure sign that consumers would soon pay more for medical coverage," a survey by the Kaiser Family Foundation and the Health Research and Educational Trust says. In 2000, employers' health costs increased 8.3% and in 1999, they increased 4.8% (Rosenblatt, Los Angeles Times, 9/7). The survey, the third annual report on employers' health costs, includes responses from 1,907 public and private employers, as well as information from KPMG Peat Marwick surveys between 1991 and 1998 and the Health Insurance Association of America-sponsored survey of employers conducted from 1987 to 1991 (Gabel et al., "Job-Based Health Insurance In 2001: Inflation Hits Double Digits, Managed Care Retreats," Health Affairs, September/October 2001). Smaller businesses, with three to nine workers, experienced the largest cost increases in 2001, about 17%. Larger businesses, with more than 200 employees, saw a 10% increase (Wall Street Journal, 9/7). "It's bad news for workers because it means that insurance will cost more, benefits will be less comprehensive and fewer employers will offer health benefits at all," KFF's Larry Levitt, a study co-author, said (Groeller, Orlando Sentinel, 9/7). He added, "Less than a year ago, you were hearing about employers jumping through hoops to attract and retain employees. You certainly don't hear about that now" (Colliver, San Francisco Chronicle, 9/7). Robert Blendon of the Harvard School of Public Health said that employers would have to pass on costs to employees "because there's nothing on the horizon to figure out how to slow these costs" (Marks, Christian Science Monitor, 9/7). According to the survey, 75% of large companies and 42% of smaller firms said they were "likely" to increase employees' share of health costs in the coming year (Brubaker, Washington Post, 9/7). In 2001, workers paid 15% of the cost for single coverage, compared with 21% in 1996 and 27% for family coverage in 2001, compared with 28% in 1996 (Snider, Bloomberg News/Arkansas Democrat-Gazette, 9/7). Slightly fewer employers offered their workers health coverage this year (65%) compared with last year (67%). Between 1998 and 2000, the percentage of companies offering health benefits increased from 55% to 67% (Chandler, Miami Herald, 9/7) For more information about the survey, go to http://www.kff.org/content/2001/20010906a/. The report about the survey appears in the September/October 2001 issue of Health Affairs.