Family Health Insurance Premiums Increased By 41 Percent - New Report

A new Commonwealth Fund report, ‘State Trends in Premiums and Deductibles, 2003: How Building on the Affordable Care Act Will Help Stem the Tide of Rising Costs and Eroding Benefits,’ finds that premiums for employer paid-for family health insurance rose by 41 percent between 2003 and 2009, an increase of three times the rate of median incomes. Further, the report suggests the insurance bought is insuring less as deductibles increased 77 percent in the same time period.

Calculations predict that if premiums continue to increase at the same rate as between 2003-2009, yearly premiums  would be an average of $23,342 by 2020, a 79 percent rise.

“Whether you live in Montana, Texas, or New York, private insurance costs have been increasing faster than working family incomes,” said Commonwealth Fund Senior Vice President Cathy Schoen, lead author of the study. “For more than a decade, families with job-based insurance have been sacrificing wages to hold on to health insurance. 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.”

On the positive side, the report details how the Affordable Care Act or ACA can potentially reduce or slow the rate of premium increase on health insurance. If corrective measures such as payment incentives and delivery system overhauls can be successfully implemented, a 1 percent reduction in pattern premium rises could be possible. At first glance, this does not sound like much of a remedy. However, if this could be achieved, yearly family premiums would be reduced by at least $2,323 and a 1.5 percent reduction in premium proliferation would enable a $3,403 in further savings.

“Health insurance is increasingly unaffordable for families, and benefits are being scaled back as employers and workers struggle to keep up in a difficult economy,” said Commonwealth Fund President Karen Davis. “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.”

The Commonwealth Fund is a private foundation that seeks to support independent research and analysis regarding health policy reform that will construct a top notch healthcare system.