Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Employer health insurance premiums increased 50 percent in every state from 2003 to 2010

17.11.2011
Employees' share of premiums increased 63 percent; workers paid more for health insurance and got less protective coverage in years leading up to passage of Affordable Care Act

Premiums for employer-sponsored family health insurance increased by 50 percent from 2003 to 2010, and the annual amount that employees pay toward their insurance increased by 63 percent as businesses required employees to contribute a greater share, according to a new Commonwealth Fund report that examines state trends in health insurance costs. The report finds that health insurance costs are outpacing income growth in every state in the country. At the same time, premiums are buying less protective coverage: per-person deductibles doubled for employees working for large as well as small firms over the same time period.

According to the report, State Trends in Premiums and Deductibles, 2003-2010: The Need for Action to Address Rising Costs, by 2010, 62 percent of the U.S. population lived in a state where health insurance premiums equaled 20 percent or more of earnings for a middle-income individual under age 65. Today there are virtually no states where premiums are relatively low compared to income. In 2003, there were 13 states where annual premiums constituted less than 14 percent of the median (middle) income; by 2010, there were none.

"Whether you live in California, Montana, or West Virginia, health insurance is expensive. Out-of-pocket costs for premiums and care are consuming a larger share of people's incomes at a time when incomes are down in a majority of states," said Commonwealth Fund Senior Vice President Cathy Schoen, lead author of the report. "Workers are paying more for less financial protection. The steady rise in costs from 2003 through 2010, before enactment of the Affordable Care Act, points to the urgent need for health insurance market and health care system reforms."

The analysis of state-by-state trends between 2003 and 2010 finds that premiums for employer-sponsored family health insurance increased 50 percent across states, reaching an average of $13,871 a year by 2010. Annual premiums rose in every state, with increases ranging from 33 percent in Idaho to 70 percent in Mississippi. Premiums for family coverage were highest in New York, Rhode Island, Connecticut, Florida, New Hampshire, and Washington, D.C., ranging from $14,730 to $15,206. But, the report finds that costs were high even in the "lowest" average-cost states. Premiums ranged from $11,379 to $12,409 in Idaho, Arkansas, Hawaii, Montana, and Alabama, the five states with the lowest average costs for private employer-based coverage.

Employees Are Paying More for Less

As premium costs have risen, employers have asked employees to contribute more to their health insurance costs by paying a larger share of premiums and accepting higher deductibles. The report shows that despite stagnant or declining incomes, the annual amount employees contributed to their health insurance premiums increased by 63 percent between 2003 and 2010. By 2010, the cost to employees rose to an average of $3,721 a year for a family policy. Workers in Michigan, Montana, Vermont, Pennsylvania, and Kentucky had the lowest average annual costs for their share of premiums, while workers in Delaware, Maine, Virginia, Texas and Florida made the highest contributions.

Despite paying more for their health insurance, employees are getting coverage that offers less protection. The report finds that per-person deductibles increased an average of 98 percent across states from 2003 to 2010. By 2010, 74 percent of workers faced a deductible, compared to 52 percent in 2003. Average deductibles exceeded $1,000 in 29 states in 2010; in 2003, not one state had an average deductible of more than $1,000. Deductibles were up for employees working in large as well as small firms, although employees of small firms generally faced higher deductibles than employee of large firms did. Deductibles were highest in Wyoming, where the average was $1,479, and lowest in Hawaii, where the average was $519.

Future Trends

The report's authors say that if the historic rate of increase between 2003 and 2010—before enactment of the Affordable Care Act—were to continue, the average premium for family health insurance coverage would increase 72 percent by 2020, reaching nearly $24,000 a year.

Slowing the rate of growth even modestly would make a significant difference for individuals, families, and businesses. Compared to historical trends, reducing the annual growth in premiums by even one percentage point would lead to $2,161 in annual premium cost savings for families by 2020. Slowing the rate of growth by 1.5 percent a year would yield savings of $3,173.

The authors note that the Affordable Care Act includes a range of insurance market reforms aimed at lowering premium growth, improving health benefits, and ensuring near-universal coverage. These include a set of affordable insurance options available through new state insurance exchanges, rules limiting insurance administrative costs and profits as a share of premiums, and review of excessive insurance premium increases. In addition, the law contains payment and health care system reforms that seek to slow the growth in costs. The authors point to the urgent need to spread reforms to private as well as public insurance.

Moving forward, the report authors conclude that lowering health care premium growth will require a significant focus on reforming how health care is paid for in the private sector, as well as in public programs like Medicare and Medicaid. In order to improve quality of care while slowing costs, wasteful overhead spending must be lowered and innovative ways of paying for care tested and spread broadly to maximize their impact.

"The combination of rapidly rising costs and stagnant incomes is putting families in an untenable situation," said Commonwealth Fund President Karen Davis. "New rules for insurers, along with new models of health care delivery such as accountable care organizations and new ways of paying doctors and hospitals, can help control health care costs and provide families and business owners with the relief they need."

The report will be available on November 17th, 2011 at: www.commonwealthfund.org/Publications/Issue-Briefs/2011/Nov/State-Trends-in-Premiums.aspx

An interactive map with premiums in each state is available at: http://www.commonwealthfund.org/usr_doc/site_docs/slideshows/

PremiumTrends2011/PremiumTrends2011.html

Methodology

Data for premiums and deductibles are from the Medical Expenditure Panel Survey of employers. State median incomes are from the Census, using two-year averages for the under-65 population. The report uses the average annual increase in premiums across states from 2003 to 2010 to project premiums in 2015 and 2020 if past rates of increase continue. The same inflation rate is applied to all states.

The Commonwealth Fund is a private foundation supporting independent research on health policy reform and a high performance health system.

Mary Mahon | EurekAlert!
Further information:
http://www.cmwf.org

Further reports about: Commonwealth Deductibles health care health insurance

More articles from Studies and Analyses:

nachricht New study: How does Europe become a leading player for software and IT services?
03.04.2017 | Fraunhofer-Institut für System- und Innovationsforschung (ISI)

nachricht Reusable carbon nanotubes could be the water filter of the future, says RIT study
30.03.2017 | Rochester Institute of Technology

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Can the immune system be boosted against Staphylococcus aureus by delivery of messenger RNA?

Staphylococcus aureus is a feared pathogen (MRSA, multi-resistant S. aureus) due to frequent resistances against many antibiotics, especially in hospital infections. Researchers at the Paul-Ehrlich-Institut have identified immunological processes that prevent a successful immune response directed against the pathogenic agent. The delivery of bacterial proteins with RNA adjuvant or messenger RNA (mRNA) into immune cells allows the re-direction of the immune response towards an active defense against S. aureus. This could be of significant importance for the development of an effective vaccine. PLOS Pathogens has published these research results online on 25 May 2017.

Staphylococcus aureus (S. aureus) is a bacterium that colonizes by far more than half of the skin and the mucosa of adults, usually without causing infections....

Im Focus: A quantum walk of photons

Physicists from the University of Würzburg are capable of generating identical looking single light particles at the push of a button. Two new studies now demonstrate the potential this method holds.

The quantum computer has fuelled the imagination of scientists for decades: It is based on fundamentally different phenomena than a conventional computer....

Im Focus: Turmoil in sluggish electrons’ existence

An international team of physicists has monitored the scattering behaviour of electrons in a non-conducting material in real-time. Their insights could be beneficial for radiotherapy.

We can refer to electrons in non-conducting materials as ‘sluggish’. Typically, they remain fixed in a location, deep inside an atomic composite. It is hence...

Im Focus: Wafer-thin Magnetic Materials Developed for Future Quantum Technologies

Two-dimensional magnetic structures are regarded as a promising material for new types of data storage, since the magnetic properties of individual molecular building blocks can be investigated and modified. For the first time, researchers have now produced a wafer-thin ferrimagnet, in which molecules with different magnetic centers arrange themselves on a gold surface to form a checkerboard pattern. Scientists at the Swiss Nanoscience Institute at the University of Basel and the Paul Scherrer Institute published their findings in the journal Nature Communications.

Ferrimagnets are composed of two centers which are magnetized at different strengths and point in opposing directions. Two-dimensional, quasi-flat ferrimagnets...

Im Focus: World's thinnest hologram paves path to new 3-D world

Nano-hologram paves way for integration of 3-D holography into everyday electronics

An Australian-Chinese research team has created the world's thinnest hologram, paving the way towards the integration of 3D holography into everyday...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Marine Conservation: IASS Contributes to UN Ocean Conference in New York on 5-9 June

24.05.2017 | Event News

AWK Aachen Machine Tool Colloquium 2017: Internet of Production for Agile Enterprises

23.05.2017 | Event News

Dortmund MST Conference presents Individualized Healthcare Solutions with micro and nanotechnology

22.05.2017 | Event News

 
Latest News

How herpesviruses win the footrace against the immune system

26.05.2017 | Life Sciences

Water forms 'spine of hydration' around DNA, group finds

26.05.2017 | Life Sciences

First Juno science results supported by University of Leicester's Jupiter 'forecast'

26.05.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>