Health premiums rise again; is there an end in sight?

Stagnant wages give health insurance premium increases more sting — and employers are requiring employees to contribute more toward premiums as they keep rising.

Andrew Cannon photo
Andrew Cannon

Anyone hoping for a reprieve from rising health insurance costs — everyone, in other words — won’t like the results of the Kaiser Family Foundation’s annual “Employer Health Benefits Survey.”

Heck, even those of us who were just hoping for premium growth near the inflation rate are disappointed.

The survey, in which more than 2,000 businesses are interviewed about the health insurance plans they offer (or in some cases, do not offer) to employees, revealed that premiums for singles increased by 8 percent while family premiums increased by 9 percent in 2011. The average premium for single coverage passed $5,400, while family coverage costs averaged $15,000.

Fifteen-thousand dollars. That’s more than the federal poverty level for a family of two. It is more, as Kaiser Family Foundation President and CEO Drew Altman noted, than the cost of a small car.

Stagnant wages give this spike even more sting. Increases in income are not offsetting these increases, and employers are requiring their employees to contribute more and more toward premiums as they continue to rise.

So, is there any end in sight? How long will premiums keep rising, and how high can they go?

It’s hard to say. Health care costs are driven by a number of factors and, as the Kaiser report illustrates, remain difficult to predict.

The health reform law, the Affordable Care Act, offers some hope for relief: Small businesses that offer health insurance to employees can receive tax credits, low- and middle-income households that do not receive insurance through an employer will be eligible for premium assistance, and the law features a number of pilot programs aimed at reducing costs.

Like any policy, however, it will require constant monitoring and occasional tweaking to meet its goals: making health care affordable and accessible for all.

Posted by Andrew Cannon, Research Associate

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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