WASHINGTON, D.C. – Premiums for employer-sponsored health insurance rose by a modest 5 percent this year, to $4,704 for single coverage and $12,680 for family coverage for the year, but they have more than doubled since 1999, from $5,791 for families, a study released last week shows.
During the same nine-year period, workers’ wages increased 34 percent and general inflation was 29 percent, noted the 2008 Employer Health Benefits Survey, released Wednesday by the Kaiser Family Foundation and the Health Research & Educational Trust and available online at ehbs.kff.org/.
Along with overall premium costs, the annual survey tracks employee contributions and deductibles, among other things, and this year’s analysis shows both have risen sharply.
In 2008, workers will pay an average of $3,354 for family coverage, more than double the $1,543 they paid in 1999 but roughly the same share of the plan costs as back then, just over 26 percent.
But last year, 12 percent of workers faced deductibles of at least $1,000 per person; now 18 percent do, the survey found. This is partly, but not entirely, driven by growth in consumer-driven plans eligible for health savings accounts, the authors said.
Employees of small and mid-size businesses are the most affected, the survey found, with 35 percent of those in groups of 3 to 199 workers now facing $1,000-plus deductibles, up from 21 percent last year. In preferred provider organizations (PPOs), the most common plans, the average deductible rose to $560 in 2008, up nearly $100 from 2007.
“With rising deductibles, more and more people face a substantial amount out of pocket for their health care before their insurance fully kicks in,” Kaiser President and CEO Drew Altman said in a news release. “Health insurance is steadily becoming less comprehensive, and it’s no wonder that in today’s tough economic climate, many families count health care costs as one of their top pocketbook issues.”
The study is based on a survey of 2,832 randomly selected non-federal public and private firms with at least three employees; 1,927 responded to the full survey and 905 answered a single question about offering coverage. The survey was conducted between January and May.
The survey found consumer-driven plans, including those eligible for HSAs, as well as those involving employer-held health reimbursement arrangements (HRAs), continue to grow in popularity, with 8 percent of workers now covered by such plans, up from 5 percent last year.
An estimated 5.5 million workers are covered by these plans, 3.2 million of them HSA-eligible. In general, consumer-driven plans are more common in groups of fewer than 200, where 13 percent are now in this type of plan, compared with 8 percent in 2007. The average annual deductible for single coverage this year is $2,010 for HSA-qualified plans and $1,552 for HRAs.
Premiums for such plans are generally lower; on average, firms pay a total of $8,291 annually toward family coverage in an HSA-eligible plan, including HSA contributions, compared with an average of $9,495 for other types of plans.
The availability of coverage held steady this year, the survey found, with 63 percent of firms offering health benefits. But while 99 percent of firms with 200 or more workers offer them, only 49 percent of firms with three to nine workers do. In addition, firms in which 35 percent or more of workers earn $22,000 or less per year are less likely to offer benefits (40 percent) than firms with a lower proportion of lower-wage workers (68 percent), the survey found.
The survey also found that 31 percent of firms with 200 or more workers offer retiree health benefits this year, similar to the 33 percent last year but less than half the 66 percent who did so in 1988. Among those offering retiree health benefits, 69 percent said at least some active employees will be eligible for retiree health benefits if they retire at age 65 or older.
More than half of all firms offering health benefits also provide at least one of seven wellness programs: weight loss programs, gym membership discounts or on-site exercise facilities, smoking cessation programs, personal health coaching, classes in nutrition or healthy living, Web-based resources for healthy living, or a wellness newsletter.
In addition, 10 percent of firms offering health benefits give their employees the option of completing a health-risk assessment to help them identify potential health risks, and of those, 12 percent offer some sort of financial incentive for workers to complete them.
