By Katie Kerwin McCrimmon
Health insurance premiums climbed just 4 percent this year over last, but employees feel bogged down because theyre paying a bigger share of their health costs, according to a new survey from the Kaiser Family Foundation.
This is historically a very moderate increase, but people dont perceive it that waybecause year after year, the share of what they pay has gone up, said Drew Altman, president and CEO of the Kaiser Family Foundation. People still feel the pain of health care costs and worry about paying their health care bills.
Premiums have increased 80 percent since 2003 and jumped in the past by as much as 9 percent in a single year. Still, premiums now have reached $16,351 a year for family health coverage with workers paying about $4,565 of that bill.
Low-wage workers, who earn about $23,000 a year, pay an even greater share of their earnings for health benefits than people who work in higher-paying jobs, according to the new 2013 Employer Benefits Survey.
These lower income workers pay about $5,818 for less comprehensive family coverage, $1,363 more than those working in higher-paying jobs.
The study authors surveyed more than 2,000 businesses across the U.S. that offer employer-sponsored health insurance. Overall, about 93 percent of firms with 50 or more employees already provide health insurance, so the delay of one year that the Obama Administration recently granted for mandated health insurance wont affect a huge number of employers. Employer-sponsored insurance is different from the new plans that will be offered to individuals and small businesses through the new health exchange, Connect for Health Colorado.
Rates for those plans were finalized last week and its impossible to compare them to plans now on the market since the Affordable Care Act requires an expansive package of benefits, and companies can no longer exclude people with pre-existing health conditions. (Click to read Rates higher in resort areas, college townsand Colorado approves 242 health plans for the exchange.)
Altman and his team believe the lower increases in health premiums are primarily a result of the poor economy and the trend to pass along more costs to individuals, rather than a sign yet that health reform efforts are bringing down overall costs.
There are certainly other factors, but the biggest factor has just been the slow-down in the economy, which causes people to use less health care, he said.
In Colorado, Tony Gagliardi of the National Federation for Independent Business, says hes hearing concerns from members who are facing even steeper hikes. For instance, he said a representative of one global firm based in Colorado that has about 400 fully-insured employees told him they are facing an 8 percent hike in insurance premiums.
Gagliardi finds it hard to believe that costs have only gone up 4 percent across the country.
Thats not what were finding. Thats the exception, not the rule, said Gagliardi.
We need to go back to the basics. We need to look at whats driving the actual cost of health care. Why is the cost as high as it is when technology in every other industry results in a reduction of costs? Gagliardi said.
The NFIB opposes the Affordable Care Act and Gagliardi expects some employers to drop coverage if costs continue to rise.
A lot of them are not going to be able to afford to continue to provide coverage. Or they are going to shift more and more of the costs to individuals, Gagliardi said.
Thats already the case, according to the study.
The Kaiser study authors found that the share workers are paying has risen by 89 percent since 2003 from $2,412 a year for family coverage to $4,565 this year.
They also expect a greater focus on encouraging healthier behavior in coming years. And employees who dont get healthy may have to pay more.
Under the Affordable Care Act, employers will be able to use more financial incentives to try to encourage healthier behavior.
This will be an important issue to watch next year, as employers will have more flexibility and could ask workers to pay more because of their lifestyles and health conditions, said Gary Claxton, the studys lead investigator and a Kaiser vice president.