Survey: Employer-Based Health Coverage Costing More, Covering Less
Premiums for employer-sponsored health insurance continued to rise this year, despite many employees getting less comprehensive coverage, according to a new survey by the Kaiser Family Foundation and Health Research & Educational Trust, the Washington Post reports (Aizenman, Washington Post, 9/27).
For the telephone survey, researchers contacted 2,088 randomly selected public and private employers with three or more employees. The survey was conducted between January 2011 and May 2011 (Carrns, "Bucks," New York Times, 9/27).
The survey found that premiums for family coverage increased by 9% in 2011 (Washington Post, 9/27). The average annual family premium this year was $15,073, compared with $13,770 in 2010 (Wilde Mathews, Wall Street Journal, 9/28).
The survey also found that 50% of small-business employees with individual plans have annual deductibles of $1,000 or more, compared with 16% in 2006.
In addition, the portion of premiums paid by workers has surpassed wage increases and inflation, rising by 131% between 2001 and 2011 for family plans. Meanwhile, employer costs for family plans increased by 113% over the same period (Washington Post, 9/27).
Some analysts expect the increases to slow in 2012.
Drew Altman, president of the foundation, said, "A big premium jump is especially tough for workers and employers when they're facing a faltering recovery, but it's really tough for workers when wages are declining in real terms," adding, "The pain factor is pretty high right now" (Helfand, Los Angeles Times, 9/27).
Employers React by Reducing Benefits
The survey found that many employers have adopted plans that offer fewer benefits and require workers to pay more out of pocket in order to offset rising premiums without dropping coverage outright, the Post reports.
Although the share of companies offering health plans decreased from 68% to 60% during the first half of the decade, the trend has leveled off since 2005, according to the Post. Instead, businesses primarily are dealing with increasing health care costs by moving workers into plans with higher deductibles, copayments and coinsurance.
Altman said, "Without any real national discussion or debate, there's a quiet revolution going on in what we call health insurance in this country," adding, "Health insurance is becoming less and less comprehensive â¦ And we expect that trend to continue" (Washington Post, 9/27).
Emerging Trend of High-Deductible Health Plans
Altman predicted that workers will see more high-deductible health plans as health insurance costs continue to increase.
According to the survey, 17% of covered workers were enrolled in high-deductible plans this year, up from 13% in 2010 and 8% in 2009. The survey also found that 23% of businesses offering health plans had at least one high-deductible plan, an increase from 15% last year ("Bucks," New York Times, 9/27).
Republicans Use Survey To Criticize Health Reform Law
Republicans cited the survey as evidence that the federal health reform law has failed to reduce costs, The Hill's "Healthwatch" reports. They noted that President Obama during his presidential campaign pledged to lower health premiums by $2,500.
Sen. Orrin Hatch (R-Utah) said, "As this survey shows, the president's promise that his partisan health law would lower costs was just empty rhetoric," adding, "The fact is employers aren't hiring, in large part, because they have to spend more and more money on health insurance" (Pecquet, "Healthwatch," The Hill, 9/27).
The study estimates that about 1.5 percentage points of the 9% increase in family plan premiums is the result of the reform law.
According to the Journal, one possible reason for the law's limited ability to curb premiums is that 56% of workers are enrolled in employer-sponsored health plans that have been "grandfathered" under the overhaul, and as a result have not been affected by the law.
Further, just 23% of workers in the study were covered by plans that must comply with a provision in the health reform law that requires no-cost preventive services (Wall Street Journal, 9/28).
Democrats Respond to Survey, GOP Criticism
In a blog post, White House Deputy Chief of Staff Nancy-Ann DeParle wrote that the survey is "informative" but that it is "a look backwards." She encouraged U.S. residents to "look forward," adding that the overhaul "will help make insurance more affordable for families and businesses across the country."
Meanwhile, Democrats referenced a Goldman Sachs commentary that disputes theÂ foundation's findings. The Goldman Sachs commentary said, "The acceleration in the rate of increase under the Kaiser survey conflicts with almost all other survey and industry data points that show 2011 increases about the same or lower as compared to 2010."
It added, "We speculate that the Kaiser survey data sample could be somewhat distorted by the anomalously low rate of increase found for 2010 (i.e., 3%) which conflicted -- both directionally and in absolute terms -- with most other indicators of pricing for last year" ("Healthwatch," The Hill, 9/27).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.