Health Insurance Premiums Up
Employer-sponsored health insurance premiums increased by an average of 7.7% in 2006, compared with increases of 9.2% in 2005 and 13.9% in 2003, according to an annual report released on Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust, the New York Times reports (Freudenheim, New York Times, 9/27).
For the report, researchers surveyed 3,159 employers between January and May; 2,122 employers responded to the full survey, and 1,037 additional employers answered one question about whether they offered health insurance to employees. The 9.2% increase marks the smallest rise in employer-sponsored health insurance premiums since 2000, although premiums increased at more than twice the rate of employee wages (3.8%) and overall inflation (3.5%) in 2006, the report finds (Kaiser Family Foundation/HRET joint release, 9/26).
Employer-sponsored health insurance premiums have increased by 87% since 2000, according to the report (Wessel, Orlando Sentinel, 9/27).
The report also finds that employees in 2006 contributed an average of $259 more for family health insurance premiums than in 2005. In 2006, employees contributed an average of $2,973 for annual family health insurance premiums that averaged $11,480, according to the report (Pugh, Sacramento Bee, 9/27). Employees who worked for employers with three to 199 workers in 2006 on average contributed more to annual family insurance premiums than those who worked for larger employers, $3,550 compared with $2,658, respectively, the report finds (Day, Washington Post, 9/26).
On average, employees in 2006 paid for about 16% of single health insurance premiums and 27% of family health coverage premiums, the report finds (Bowman, Scripps Howard/Detroit News, 9/27). Employee contributions for family health insurance premiums have increased by about $1,350, or 84%, since 2000, the report finds (Dorschner, Miami Herald, 9/27).
According to the report, about 4% of employees with health insurance in 2006 are enrolled in consumer-driven health plans, such as high-deductible plans that qualify for health savings accounts or health reimbursement arrangements (Snowbeck, Pittsburgh Post-Gazette, 9/27). About 60% of employees with employer-sponsored health insurance in 2006 are enrolled in PPOs and about 20% are enrolled in HMOs (Lipman, Cox/Atlanta Journal-Constitution, 9/27).
The full survey is available online. Results from the report also appear in an article available online on the Health Affairs Web site.
The report is "sure to cause some new outrage" over health insurance costs, columnist David Leonhardt writes in a New York Times opinion piece. According to the report, the cost of health insurance has doubled in seven years, "while incomes and company revenue, which pay for health insurance, haven't risen nearly as much," Leonhardt writes. He adds, "Many executives have decided that they cannot afford to keep insuring their workers, and the portion of Americans without coverage has jumped 23% since 1987."
Leonhardt writes that "restraining costs" is not the "solution." He writes, "Living in a society that spends a lot of money on medical care creates real problems, but it also has something in common with getting old," adding, "Would you prefer spending an extra $5,500 on health care every year -- or losing 10 years off your lifespan?"
The main "cause of the cost increases is still the one you can see at the hospital and in your medicine cabinet -- defibrillators, chemotherapy, cholesterol drugs, neonatal care and other treatments that are both expensive and effective," Leonhardt writes. The "best way to reduce health care spending is to reduce health care itself," he writes.
"It's easy to be against high costs, and it will no doubt be hard to come up with a broad health care solution," Leonhardt writes, adding, "But the way to start is by acknowledging that an affluent society should devote an ever-growing share of its resources to the health of its citizens" (Leonhardt, New York Times, 9/27).
ABCNews' "World News Tonight" on Tuesday reported on the report. The segment includes comments from Claxton, employers and employees (Stark, "World News Tonight," ABCNews, 9/26). A video excerpt of the segment is available online in RealPlayer. In addition, APM's "Marketplace" on Tuesday reported on the report. The segment includes comments from Claxton, Gabel and Peter Lee, president and CEO of the Pacific Business Group on Health (Palmer, "Marketplace," APM, 9/26). The complete transcript and audio of the segment in RealPlayer are available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.