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National Institutes of Health
Family Health Insurance Premiums Jump 4 Percent in 2012
Rise outpaced U.S. wage growth and general inflation, survey shows
Wednesday, September 12, 2012
Family health premiums reached $15,745 annually in 2012, with workers contributing on average $4,316 towards their coverage, revealed a national survey of employers conducted by the Kaiser Family Foundation and the Health Research & Educational Trust.
Worker-only health coverage rose 3 percent, to $5,615 a year. These workers pay, on average, $951 towards their coverage.
Meanwhile, wages have grown just 1.7 percent, noted a Kaiser news release. Family premiums also have outpaced general inflation, which has increased 2.3 percent.
Despite the rising cost of family coverage, premium growth is still at historic lows and remains an important benefit for workers, the survey sponsors said.
"In terms of employee insurance costs, this year's 4 percent increase qualifies as a good year, but it still takes a growing bite out of middle-class workers' wages, which have been flat or falling in real terms," Drew Altman, president and CEO of Kaiser, said in the release.
The 14th annual survey involved more than 2,000 small and large employers. It found a big discrepancy in the benefits and contributions of companies with many lower-wage workers (earning no more than $24,000 a year) compared to companies with many higher-paid employees (making at least $55,000 a year).
Employees at lower-wage firms on average contribute $4,977 each year to insure their families. That's $1,000 more than the contributions of higher-paid workers at other companies. However, firms with lower-wage workers still, on average, pay less in total premiums for family coverage than firms with higher-paid employees.
Lower-wage workers are also more likely to have high deductibles, the survey noted. Forty-four percent of covered workers at low-wage firms pay an annual deductible of at least $1,000, compared with 29 percent of employees at high-wage firms. Overall, one-third of insured workers must meet a $1,000 deductible, and 14 percent face deductibles of at least $2,000 each year, the researchers found.
Bigger firms are more likely to offer flexible-spending accounts and allow workers to pay for the premiums with pre-tax dollars. Of the larger firms, 91 percent allow pre-tax deductions for premiums, compared with 41 percent of smaller companies. Moreover, 76 percent of large companies offer pre-tax flexible-spending accounts, compared with 17 percent of smaller employers, the results showed.
"This year's survey suggests that working families at the low end of the wage scale face significant out-of-pocket costs for coverage," study lead author Gary Claxton, a Kaiser vice president and director of the foundation's Health Care Marketplace Project, said in the release. This was true even though their "coverage itself tends to be less comprehensive," he added.
The study authors estimated that the 2010 Affordable Care Act, which allows young adults up to age 26 without employer coverage of their own to be covered as dependents on their parents' plan, had extended coverage to 2.9 million young adults -- an increase of 2.3 million people since 2011.
The investigators also found that fewer workers are in "grandfathered" plans, which exempt employees from some health reform requirements -- such as covering preventive benefits with no cost sharing and having an external appeals process -- with 48 percent of covered workers currently covered by grandfathered plans, down from 56 percent in 2011.
The number of companies offering health benefits to their employees has not changed (about 61 percent). Co-pays for covered workers are on average $23 for in-network primary care doctors and $33 for visits with specialists. ER visits typically cost $118. Average co-pays for drug plans with three or more tiers are $10 for generic drugs or $29 for brand-name medications. Estimated costs for non-preferred brands are $51 and for specialty drugs about $79.
This year, 31 percent of employers extended health benefits to same-sex domestic partners, a 10 percent rise over 2009. Also, 37 percent of firms offer these benefits to unmarried opposite-sex partners, up from 31 percent in 2009, the researchers found.
"Continuing to ensure that Americans have coverage options that are affordable is vitally important for our nation's health," Maulik Joshi, president of Health Research & Educational Trust and senior vice president for research at the American Hospital Association, said in the release.
A summary of the report and a commentary by Altman were published online Sept. 12 in the journal Health Affairs.
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