The financial burden of health insurance for American workers and their families increased this year in what some analysts predict may be a harbinger of premiums to come.
According to the annual survey released Tuesday by the Kaiser Family Foundation and the Health Research & Educational Trust, the average cost for employer-sponsored family health insurance rose 9 percent this year to an average premium of $15,073. The average worker's share of that premium was $4,129. Individual coverage rose 8 percent to $5,429, with workers paying $921 on average.
Both increases were the largest one-year hikes since 2005 and far outdistanced the 2 percent increase in wages and the 3.2 percent rise in inflation.
The study set off the usual election-year posturing, with opponents to President Obama's health care reform package blaming the Affordable Care Act for the increased cost of employer-based health insurance while supporters of the reform cite it as the solution, not the cause, of runaway health care costs.
Industry analysts point out that it's too early for health care reform to have contributed much to the latest numbers, since its main components don't kick in until 2014. On the other hand, pro-reform voices have a strong case for change, given that family coverage premiums have risen 113 percent since 2001 compared with a 34-percent rise in wages and a 27 percent increase in inflation over the same period.
Kaiser Family Foundation president and CEO Drew Altman says the rates, which were set last year, most likely reflect an expectation by insurers that the economic recovery would be further along this year, thus enabling more Americans to seek medical care.
One claim to which few lend any credence is that the insurance companies need the money. Barclays Capital reports that 13 of the top 14 health insurance companies beat their projected earnings in the first quarter, their profits averaging more than 46 percent higher than expected.
As for employers, they've been gradually shifting more of the cost of health insurance onto their workers. While wages have grown by 50 percent since 1999, the dollar amount that workers contribute toward their premium has grown by 168 percent. A Kaiser survey last year found that employees now shoulder nearly 30 percent of the cost of their employer-based plan, up 3 percent from the previous year, while those with single coverage pay about 19 percent, up 2 percent from the previous year.
In all likelihood, one factor that contributed to the dramatic spike in premiums was insurer uncertainty over the post-reform landscape, especially the health care reform requirement that kicked in this month requiring states to closely scrutinize any proposed health insurance rate increase greater than 10 percent.
From where I'm sitting, these premium hikes look like a pre-emptive money grab before health care reform narrows the trough.
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