By Mike Shields
KHI News Service
Click here for larger graphic (Cathy McNorton/KHI)
TOPEKA, Sept. 11
New survey results released today show that employer-sponsored health insurance premiums this year went up on average 6.1 percent nationally, outstripping both the rates of inflation and family income.
“The good news is that it”s the lowest increase in health insurance premiums since 1999. The bad news is that it is more than double the rate of inflation. And since 2002, health insurance premiums have increased 78 percent versus an overall earnings increase of 17 percent,” said Jon Gabel, a senior fellow at the National Opinion Research Center at the University of Chicago.
Gabel was commenting on the
“Employer Health Benefits 2007 Annual Survey”
done by the Kaiser Family Foundation and the Health Research and Educational Trust. Key findings from the survey were published today in the policy journal Health Affairs. Gabel and Kaiser”s Gary Claxton were co-author of that summary article.
Kaiser held a national press teleconference this morning and Gabel and Claxton joined Kaiser CEO Drew Altman and others for the event.
The annual survey shows how employer coverage is changing over time in terms of availability, costs and coverage. It was done between January and May of this year and included 3,078 randomly selected, non-federal public and private firms with three or more employees. Most Americans with health insurance, about 158 million people, rely on employer-sponsored health insurance. Last year, 1.7 million people in Kansas had health insurance through their employer, according to the U.S. Census Bureau.
Click here for larger graphic (Cathy McNorton/KHI)
The survey showed that the numbers of people insured through their workplace had not changed statistically “despite the comparatively low rate of increase in premiums and a strong labor market,” Claxton said.
The fact that the numbers of people insured at the workplace have not increased despite relative prosperity and that the percentage of small firms offering insurance has been in decline since 2001 points to general weakening of the employer-based health insurance system, the researchers said.
“We are not falling off a cliff, but we are witnessing a slow but certain erosion of our employer-based system,” Gabel said.
“Consumer-driven”
According to the survey, there has been only “modest” enrollment in so-called “consumer-driven” health plans, those which typically achieve lower premium costs by coupling high deductibles with tax-preferred health savings or health reimbursement accounts. Many Kansas legislators have said they support “consumer-driven” health plans. Missouri earlier this year passed health reform legislation that promotes their use.
Click here for larger graphic (Cathy McNorton/KHI)
But in spite of the “extensive attention” paid to consumer-driven health plans, the survey found they have made few inroads into the employer market.
“Such plans cover about 5 percent of all covered workers, which is not statistically different from the 4 percent share recorded in 2006,” Kaiser officials said.
Asked why there seems to be little interest in the plans even though they promise savings for employers and lower premiums for policyholders, the researchers cited the relative newness of the plans and the fact they are relatively complicated for employers to describe and for workers to understand. And there is the matter of the high deductibles, which the researchers said tend to make them less attractive.
“The Achilles” heel of the consumer-driven plans is the employee take-up rate,” Gabel said. “People who don”t have any money in the bank are very much intimidated by a high $2,000 deductible.”
Other key findings:
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The average annual family health insurance premium is $12,106, about the same as the full-time earnings of someone working at the new federal minimum wage. The employer pays $8,824 of that.
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At the same time health insurance premiums rose 6.1 percent, overall inflation went up 2.6 percent and workers” earnings 3.7 percent.
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The employee”s average monthly premium contribution has gone from $129 in 1999 to $273 in 2007.
During today”s press conference, Kaiser officials also made available information from other surveys and research by the organization which indicated that:
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Americans are more worried having to pay more for health insurance than they are about terrorism or violent crime. The only thing more worrying than health insurance costs was the fear that their incomes wouldn”t keep up with rising prices.
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Health care is second only to Iraq as a concern for voters heading into the 2008 elections.
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Health insurance companies have recorded “unprecedented profitability” since 1999, and hospital margins are “reasonably strong.” “What we have not seen is a decline in claim expenses,” Gabel said.
-Mike Shields is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
mshields@khi.org
or at 785-233-5443, ext. 123.