Skyrocketing Health Insurance Premiums Continue to Tax Employers, Employees
Health insurance premiums increased 13.9 percent in 2003, a larger increase than last year and the largest since 1990, according to the 2003 Employer Health Benefits Survey released in September by the Kaiser Family Foundation and the Health Research and Educational Trust. This marks the third year in a row of double-digit increases in health insurance premiums.
While employers are not dropping coverage, most are passing the higher costs to employees. Over the last three years, the average premium that employees pay for family coverage has increased almost 50 percent, from $1,619 to $2,412. The typical family health insurance policy now averages $9,068, with employers paying 73 percent and employees 27 percent.
The survey was conducted between January and May of 2003 and included 2,808 randomly selected public and private firms ranging in size from three to more than 300,000.
Nearly four in five workers face a deductible before health care expenses are covered under their plans. For PPOs--the most common type of plan--in-network deductibles average $275 for single coverage. Those working for smaller firms have even higher deductibles, averaging $419. PPO deductibles for out-of-network services average $561, up 20 percent from last year.
Despite continued increases in premiums, employers appear reluctant to drop health insurance for their employees. Only 10 percent indicated that they will reduce eligibility, and only 16 percent said they will drop coverage altogether. However, many employers say they will increase employee contributions and cost-sharing in the future.
The 2003 Employer Health Benefits Survey is available online at www.kff.org.
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