| October 3, 2008 Volume 109 Number 19
Health insurance premiums rise
Health insurance premiums rose again this year — 5 percent, according to the annual Employer Health Benefits Survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust.
The average premium for employer-sponsored health insurance was $4,704 for individual coverage and $12,680 for family coverage as of early 2008. That’s a 119 percent increase over what it was when the annual survey began in 1999 —$5,791. During the same nine-year period, workers’ wages went up just 34 percent, while general inflation rose 29 percent. So health insurance premiums have risen at more than triple the rate of wages and inflation the last decade.
But the premium increases have slowed lately. Premiums went up 10 to 13 percent every year from 2000 to 2004, but annual increases have been under 6 percent the last three years. This year, with inflation raising prices on most items, premiums paid by employers went up only about the rate of overall inflation. And this year’s 5 percent increase was the smallest found since the survey began.
Still, workers’ share of the premium is taking a bite out of paychecks. It now averages $3,334 — more than double what workers paid nine years ago. Covered workers are now paying 16 percent of the cost of individual coverage and 27 percent of the cost of family coverage, on average.
All told, 63 percent of employers offer health benefits, though that varies by the size of the business. Just 49 percent of firms with three to nine employees offer health coverage, while 95 percent of firms with 50 or more employees do so. And 99 percent of unionized employers offer health coverage, while just 60 percent of non-union employers do.
The number of employers who offer retiree health insurance continued to drop also: 31 percent of large firms (200 or more workers) offer retiree health benefits this year, less than half the 66 percent who did so in 1988.
And the future looks worse: 6 percent of employers who offer health benefits said they are likely to drop coverage in the next year. And 40 percent said they are likely to increase the amount workers contribute to premiums; 41 percent to increase deductibles; and 45 percent to increase office visit co-pays.
The survey, released Sept. 24, was conducted between January and May of 2008 and included 2,832 randomly selected, non-federal public and private firms with three or more employees. A full report on the survey is available at ehbs.kff.org.
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