Family Health Insurance Premiums Outpace Single Coverage Plans
Premiums for family coverage through employer-sponsored health insurance plans rose 5% this year, though the average premium for single coverage was not statistically different from last year, according to a survey released last week by the Kaiser Family Foundation and the Health Research & Educational Trust.
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Annual premiums rose to $13,375 for family coverage and $4,824 for single coverage, the 2009 Employer Health Benefits Survey concluded.
In the case of the self-insured plans, projected premium equivalents were used to determine employee contributions. Approximately 43% of plan members covered by the survey are enrolled in fully insured plans.
Although this year’s increase was more moderate than rate increases earlier in the decade, it still outpaced the overall U.S. inflation rate, Drew Altman, Kaiser president and chief executive officer, said during a Washington news conference about the survey results.
“At a time when people and employers have been hit by all kinds of other economic shock,” the “combination of rising health care costs and the recession increases the pain level,” Mr. Altman said.
In fact, 34% of individuals responding to a July Kaiser Family Foundation Health Tracking Poll said they were “very worried” they will not be able to afford needed health care services in the future, compared with 28% in September 2008, he said.
As the cost of health insurance continues to rise, so do employee premiums and other cost-sharing, Maulik S. Joshi, president of HRET and senior vp for research at the American Hospital Assn., said during the news conference.
Twenty-one percent of firms said they reduced the scope of benefits or increased employee cost-sharing this year compared with last year; 15% said they increased workers’ share of premiums, according to the survey.
Moreover, 41% of employers said they are very or somewhat likely to increase premium contributions next year; 40% may increase office visit cost-sharing; 37% are likely to increase employee copayments or coinsurance for prescription drugs; and 36% are likely to increase deductibles next year, the survey found.
This year, employee premium contributions averaged 17% for single coverage and 27% for family coverage, with monthly contributions averaging $65 for single coverage and $293 for family coverage, the survey found.
Despite rising costs, the percentage of employers offering health plan coverage in 2009 was not significantly different than 2008: 60% vs. 63%, respectively. The difference, because of fluctuations in the numbers and types of employers responding to the survey, was not statistically significant, the survey’s authors said.
The most prevalent type of plan offered continued to be the preferred provider organization plan, offered by 44% of employers surveyed; followed by point-of-service plans, offered by 36%; health maintenance organization plans, offered by 19%; consumer-driven plans, offered by 12%; and traditional indemnity plans, offered by 4%.
Eighty-six percent of firms offering health benefits offer only one type of plan. However, large employers are more likely to offer more than one type of plan than small employers: 45% vs. 13%, respectively.
Enrollment in the various types of plans offered showed movement away from traditional indemnity plans toward PPO plans. Just 1% of employees were enrolled in traditional indemnity plans in 2009, down from 2% in 2008. Meanwhile, PPO enrollment grew to 60% from 58% the previous year. Also losing ground were POS plans, with just 10% of employees enrolled in 2009 vs. 12% in 2008. Enrollment rates for HMOs and CDHPs held steady at 20% and 8%, respectively, in 2009 and 2008.
Although CDHP enrollment didn’t grow this year, the percentage of covered workers enrolled in a plan with an annual deductible of $1,000 or more for single coverage grew to 22% in 2009 from 18% in 2008. Employees at small firms were more likely than those at large employers to be enrolled in plans with deductibles of $1,000 or more: 40% vs. 13%, respectively. Last year, 35% of employees at small firms had deductibles of at least $1,000 vs. 9% at large firms.
The nationwide survey, now in its 11th year, included responses from 2,054 randomly selected employers ranging in size from as few as three employees to more than 10,000 employees. Interviews were conducted by telephone between January and May. The survey can be found at www.kff.org/insurance/7936/index. cfm.