Premiums for employer-sponsored family health insurance are climbing at a startling rate — three times faster than families’ incomes — and are on pace to reach more than $23,000 within 10 years.
On average across all states, premiums rose 41 percent from 2003 to 2009, reveals a new Commonwealth Fund report. The analysis warns that if the rise in premiums continues at this rate, family premiums would soar to $23,342 by 2020.
“Whether you live in Montana, Texas or New York, private insurance costs have been increasing faster than working family incomes,” said Cathy Schoen, Commonwealth Fund senior vice president and lead author of the report, “State Trends in Premiums and Deductibles: How Building on the Affordable Care Act Will Help Stem the Tide of Rising Costs and Eroding Benefits.”
The report shows premium increases range from 21 percent in Delaware to 59 percent in Louisiana. By 2009, family premiums were highest in Alaska, Connecticut, Massachusetts, Vermont, Wisconsin and Wyoming, with premiums exceeding $14,000 a year. Lower premiums settled between $11,000 and $12,000 in Alabama, Arkansas, Hawaii, Idaho, Kansas, Montana, North Dakota, Ohio, Oklahoma, South Dakota and Utah.
Deductibles also rose sharply across the U.S., increasing an average of 77 percent in the same six years. In addition, more workers are paying deductibles: 74 percent faced a deductible in 2009 compared with 52 percent in 2003.
“The good news is that the Affordable Care Act reforms provide a foundation to improve coverage and slow health care cost growth in the future,” Schoen said.
The Patient Protection and Affordable Care Act (ACA), enacted in March to provide relief to employers, came at a time when small-business owners were struggling to give coverage to their uninsured workers. Some still are.
Over time, the reforms could save up to $3,000 per year for family policies by 2020, researchers say.
“If implemented well, provisions in the Affordable Care Act — including some starting this year, such as tax credits for small businesses to provide coverage, dependent coverage for young adults up to age 26, and elimination of co-payments for preventive care — have the opportunity to reverse these unsustainable increases and ensure that families in every state have access to affordable, comprehensive health insurance,” said Karen Davis, president of Commonwealth Fund, a private foundation that researches health policy reform.
The report summarizes ACA provisions that have the potential to slow the rate of cost growth if private and public payers adopted them: If reforms slow increases by one percentage point a year, annual family premiums would be $2,323 lower by 2020; slowing premium growth by 1.5 percentage points a year would yield $3,403 in premium savings.
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