By Nellie Bristol, CQ HealthBeat Associate Editor
November 17, 2011 --Premiums for employer-based family health insurance rose 50 percent on average between 2003 and 2010, with employees paying a higher percentage of the costs, The Commonwealth Fund found in a recent report.
Total premiums in 2010 averaged $13,871 for family coverage. The average annual employee premium share was $3,721 in 2010, compared with $2,283 in 2003.
In addition, insurance costs have risen three times faster than wages. By 2010, the report says, there were 23 states in which average premiums were equal to 20 percent or more of median income for those under 65, compared with just one state in 2003.
"This report reveals that the combination of rapidly rising health care costs and stagnant incomes is putting families in an untenable position," said Commonwealth Fund President Karen Davis.
The report is part of a Commonwealth Fund series on implementation of the health overhaul law (PL 111-148, PL 111-152). It calculates that without insurance market and delivery system changes included in the law, family premiums would climb to almost $24,000 a year by 2020. The report ascribes projected annual premium savings of 1-1.5 percentage points to the overhaul.
A state-by-state analysis shows 2010 premiums ranging from a low of $11,379 in Idaho to a high of $15,000 in New Hampshire and the District of Columbia. "Notably, many states with premiums above the national average have family incomes below the national average," the report says.
In a press call releasing the report, study author Cathy Schoen said the figures include the total costs of health insurance and not just the employee share to illustrate how employers see the costs and how they factor them in to other types of compensation, including wages and pensions.
"Although employees typically don't see the total costs of insurance, the sharp increase in total costs has in effect meant ever less for wages and salaries as businesses trade off wage increases to pay for the rising cost of insurance," Schoen said.
Without an overhaul of our health care system, "families will continue to be forced to trade off incomes for health benefits," producing a dampening effect on economic growth, she added.
While federal health programs tend to attract the most political attention, Schoen said, the private sector is key to making health care more efficient and affordable.
"Overall success of the [health system] reforms will be contingent on public and private stakeholders working together to ensure that markets operate in the broad national interest of better health, more positive health care experiences, and lower costs," the analysis concludes.
