Health Insurance Premiums: Commonwealth Fund Resources

April 5, 2012

Updated: April 5, 2012

Rising Health Care Administrative Costs

Estimating the Impact of the Medical Loss Ratio Rule: A State-by-State Analysis,M. A. Hall and M. J. McCue, The Commonwealth Fund, April 2012.

State Trends in Premiums and Deductibles, 2003–2010: The Need for Action to Address Rising Costs, C. Schoen, A.-K. Fryer, S. R. Collins, and D. C. Radley, The Commonwealth Fund, November 2011.

 Final Regulation on Medical Loss Ratio Reporting and Rebates: Good for Consumers, S.R. Collins and T. Garber, The Commonwealth Fund Blog, December 2011.

Understanding the Rise in Health Insurance Premiums, J. Gabel, R. McDevitt, and R. Lore, The Commonwealth Fund Blog, September 2011. An analysis conducted by Jon Gabel and colleagues attributes only 1.8 percentage points of the recently reported 8 percent to 9 percent rise in premiums to the Affordable Care Act's insurance reforms

 Update: New Review Process for "Unreasonable" Premium Hikes, S. R. Collins, The Commonwealth Fund Blog, May 2011. 
The U.S. Department of Health and Human Services has released final regulations on an important Affordable Care Act provision aimed at slowing the growth of health insurance premium increases. In this post, Sara Collins reviews the new process for the annual review of "unreasonable" increases in premium rates by insurance carriers. 

The Individual Insurance Market Before Reform: Low Premiums and Low Benefits, H. Whitmore, J. R. Gabel, J. Pickreign et al., Medical Care Research and Review, published online March 21, 2011.
This Commonwealth Fund–supported study surveyed individual insurance plans in 10 randomly selected states to provide a snapshot of the pre-reform market in terms of premiums, deductibles, out-of-pocket limits, cost-sharing, and covered services.

State Trends in Premiums and Deductibles, 2003–2009: How Building on the Affordable Care Act Will Help Stem the Tide of Rising Costs and Eroding Benefits, C. Schoen, K. Stremikis, S. K. H. How, and S. R. Collins, The Commonwealth Fund, December 2010.
This analysis finds that premiums for businesses and their employees increased 41 percent across states from 2003 to 2009, while per-person deductibles jumped 77 percent in large as well as small firms.

Rite of Passage: Young Adults and the Affordable Care Act of 2010, S. R. Collins and J. L. Nicholson, The Commonwealth Fund, May 2010.
Young adults between the ages of 19 and 29 represent one of the largest segments of the uninsured; approximately 13.7 million were uninsured in 2008. This issue brief describes critical provisions in the new health reform law that will help to cover millions of uninsured young people.

Group Insurance: A Better Deal for Most People Than Individual Plans, R. McDevitt, J. Gabel, R. Lore et al, Health Affairs Web First, December 3, 2009.
In this Fund-supported Health Affairs study, employer-sponsored health plans were found to be much more affordable, and to offer more comprehensive coverage, than individual market plans.

Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes—State Health Insurance Premium Trends and the Potential of National Reform , C. Schoen, J. L. Nicholson, and S. D. Rustgi, The Commonwealth Fund, August 2009.
This analysis of federal data finds that if premiums for employer-sponsored insurance grow in each state at the projected national rate of increase, then the average premium for family coverage would rise from $12,298 (the 2008 average) to $23,842 by 2020—a 94 percent increase. However, if health system reforms were able to slow premium growth by 1 percentage point in all states, by 2020 employers and families together would save $2,571 per premium for family coverage, compared with projected trends. If growth could be slowed by 1.5 percentage points—a target recently agreed to by a major industry coalition—yearly savings would equal $3,759. The analysis presents state-by-state data on premium costs for 2003 and 2008, as well as projections, using various assumptions, for costs in 2015 and 2020.

Why Health Reform Must Counter the Rising Costs of Health Insurance Premiums , K. Davis, The Commonwealth Fund, August 2009.
Commonwealth Fund President Karen Davis emphasizes that without health reform that controls premium costs, which are projected to rise to 24 percent of median family income by 2020, middle-class families will be priced out of health insurance altogether.

"Trends in Underinsurance and the Affordability of Employer Coverage, 2004–2007," J. R. Gabel, R. McDevitt, R. Lore et al., Health Affairs, June 2, 2009 28(4):w595–w606.
Out-of-pocket health care expenses for workers covered by employer-sponsored plans grew by more than one-third between 2004 and 2007, according to this Commonwealth Fund-supported study.

Out-of-pocket health care expenses for workers covered by employer-sponsored plans grew by more than one-third between 2004 and 2007, according to a Commonwealth Fund-supported study in Health Affairs. TWhy Health Reform Will Bend the Cost Curve, K. Davis, and K. Stremikis, Center for American Progress and The Commonwealth Fund, December 2009.
The health reform bills passed by the U.S. House of Representatives and under consideration in the Senate introduce a range of payment and delivery system changes designed to achieve a significant slowing of health care cost growth. Most assessments of health reform legislation have focused only on the federal budgetary impact. This study projects the effect of national reform on total national health expenditures and the insurance premiums that American families would likely pay. We estimate that the combination of provisions in the House and Senate bills would save $683 billion or more in national health spending over the 10-year period 2010–2019 and lower premiums by nearly $2,000 per family. Moreover, the annual growth rate in national health expenditures could be slowed from 6.4 percent to 6.0 percent.

Failure to Protect: Why the Individual Insurance Market Is Not a Viable Option for Most U.S. Families, M. M. Doty, S. R. Collins, J. L. Nicholson, and S. D. Rustgi, The Commonwealth Fund, July 2009.
Between 2001 and 2007, an increasing share of adults with private insurance—whether employer-based coverage or individual market plan—spent a large amount of their income on premiums and out-of-pocket medical costs, were underinsured, and/or avoided needed health care because of costs. Those with coverage obtained in the individual market were the most affected. Over the last three years, nearly three-quarters of people who tried to buy coverage in this market never actually purchased a plan, either because they could not find one that fit their needs or that they could afford, or because they were turned down due to a preexisting condition. Even people enrolled in employer-based plans are spending larger amounts of their income on health care and curtailing their use of needed services to save money. The findings underscore the need for an expansion of affordable health insurance options, particularly during a time of mounting job losses.

Chronic Burdens: The Persistently High Out-of-Pocket Health Care Expenses Faced by Many Americans with Chronic Conditions , P. Cunningham, The Commonwealth Fund, July 2009.
Using data from the 2001–2005 Medical Expenditure Panel Survey, this study shows that nearly 40 percent of nonelderly adults with three or more chronic conditions had out-of-pocket expenses and premiums exceeding 5 percent of income for two consecutive years, compared with 20 percent of people who had a single chronic condition and 14 percent who had no chronic conditions. Prescription drug spending accounts for over half of the out-of-pocket spending by individuals who have multiple chronic conditions and who have had persistently high financial burdens that last two years or more. The prevalence of persons with persistently high financial burdens is likely to increase in the future, because of expected increases in prescription drug costs as well as chronic disease prevalence.

Starting on the Path to a High Performance Health System: Analysis of Health System Reform Provisions of Reform Bills in the House of Representatives and Senate, K. Davis, S. Guterman, S. R. Collins et al., The Commonwealth Fund, December 2009.
This report analyzes the health reform bill passed by the U.S. House of Representatives and the reform provisions under consideration in the Senate that would affect providers’ financial incentives, the organization and delivery of health care services, investment in prevention and population health, and the capacity to achieve the best health care and health outcomes for all. The bills represent a pragmatic approach to closing the gaps in insurance coverage by: building on a mix of employer coverage, other private plans, and a public plan in a health insurance exchange, or exchanges; strengthening Medicare; and expanding Medicaid. Even under current estimates, 18 million to 23 million people will remain uninsured, however, and many others will still face financial barriers to obtaining needed care or hardship in paying premiums or medical bills.

The Comprehensive Congressional Health Reform Bills of 2009: A Look at Health Insurance, Delivery System, and Financing Provisions, S. R. Collins, K. Davis, R. Nuzum, S. D. Rustgi, S. Mika, and J. L. Nicholson, The Comprehensive Congressional Health Reform Bills of 2009: A Look at Health Insurance, Delivery System, and Financing Provisions, The Commonwealth Fund, October 2009 (updated January 7, 2010).
This report provides an overview of key provisions of the two comprehensive health reform bills passed by the House of Representatives and the Senate. While the general frameworks of the bills are very similar—both include provisions intended to improve and expand coverage and all would create a comprehensive and coherent strategy for improving health care quality—they differ in a few key respects. Most important, the Senate bill does not include a requirement that employers offer coverage or create a public health insurance plan; the House bill includes both features.

Maintaining Health Insurance During a Recession: Likely COBRA Eligibility,  M. M. Doty, S. D. Rustgi, C. Schoen, and S. R. Collins, The Commonwealth Fund, January 2009
Analysis of the 2007 Commonwealth Fund Biennial Health Insurance Survey finds that two of three working adults would be eligible to extend job-based coverage, under the 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA) if they became unemployed. Under COBRA, however, unemployed workers would have to pay four to six times their current contribution at a time of sharply reduced income. In fact, the latest national figures indicate that, because of high premiums, only 9 percent of unemployed workers have COBRA coverage. Substantial financial assistance of 75 percent to 85 percent of premiums could help laid-off workers maintain coverage.

Benefits and Premiums in Job-Based Insurance , J. Gabel, R. McDevitt, L. Gandolfo et al., Published in Health Affairs, May/June 2006.
Employees in the nation's smallest firms pay, on average, 18 percent more in health insurance premiums for the same benefits than do those in the largest firms, this Commonwealth Fund–supported study finds. By examining coverage provided by various types of employers and insurance plans, the study also reveals wide variations by state—with employees in states with large urban populations, like California, Massachusetts, New York, and Pennsylvania, getting better benefits and more value than those in rural states.


Estimated Annual Premiums Under Different Scenarios, 2010, from "How Health Care Reform Can Lower the Costs of Insurance Administration," S. R. Collins, R. Nuzum, S. Rustgi, S. Mika, C. Schoen, and K. Davis, How Health Care Reform Can Lower the Costs of Insurance Administration, The Commonwealth Fund, July 2009.

Premiums Rising Faster Than Inflation and Wages, from "The Health Insurance Provisions of the 2009 Congressional Health Reform Bills: Implications for Coverage, Affordability, and Costs," S. R. Collins, K. Davis, J. L. Nicholson, S. D. Rustgi, and R. Nuzum, The Commonwealth Fund, January 2010.


Commonwealth Fund Resources on Health Insurance Premiums