Employer sponsored health insurance premiums in the US went up on average by 6.1 per cent in 2007 compared to 2006, outstripping workers’ pay (rose by 3.7 per cent on average) and overall inflation (up by 2.6 per cent).
These are the key findings of the 2007 Employer Health Benefits Survey announced this week by the Kaiser Family Foundation and Health Research and Educational Trust. A version of the report is published in the September/October issue of the journal Health Affairs.
The average health insurance premium for a family now amounts to 12,106 dollars a year, with workers on average paying 3,281 dollars.
Dr Drew E Altman, President and CEO of Kaiser said while there was evidence of some “moderation” in the increases (this latest figure is an eight year low in the rate of increase) there was still no cause to celebrate:
“Every year health insurance becomes less affordable for families and businesses. Over the past six years, the amount families pay out of pocket for their share of premiums has increased by about 1,500 dollars.”
Dr Mary A Pittman, President of the Health Research and Educational Trust (HRET) said the greatest burden of all health care costs falls to low wage earners, for whom the number of options is limited. Also, the numbers of uninsured continue to rise, she said:
“Although the economy seems to be strong, between 2005 and 2006 the total number of uninsured still rose by 5 percent, including a 9 percent increase in the number of uninsured children.”
158 million Americans rely on employer-sponsored health insurance, and the annual report by Kaiser and HRET details how trends in employer coverage are changing, including with respect to availability and cost.
The survey was carried out between January and May of 2007 by randomly sampling 3,078 non-federal public and private firms employing three or more workers. 1,997 of the firms answered all the questions in the telephone survey and 1,081 completed a single question about coverage.
The overall response rate was 49 per cent and the authors used the 0.05 per cent confidence level as the test of significance in the statistical analysis, unless otherwise stated.
Although premiums went up faster than wages, the gap this year is considerably smaller than it was four years ago (2.4 per cent compared with 10.9 per cent) when premiums rose by 13.9 per cent and wages only by 3 per cent.
Gary Claxton of Kaiser, and colleagues, authors of the Health Affairs article on the report concluded that enrollment in different types of health plan did not change significantly, and there was only a modest growth in enrollment in high deductible plans with a savings option.
They also wrote that:
“Despite the comparatively low rate of increase in premiums and a strong labor market, the percentage of the workforce obtaining coverage from employer-sponsored plans remained unchanged since 2006.”
“Health Benefits In 2007: Premium Increases Fall To An Eight-Year Low, While Offer Rates And Enrollment Remain Stable.”
Gary Claxton, Jon Gabel, Bianca DiJulio, Jeremy Pickreign, Heidi Whitmore, Benjamin Finder, Paul Jacobs, and Samantha Hawkins.
Health Affairs, September/October 2007; 26(5): 1407-1416.
Click here for the full report: Employer Health Benefits 2007 Annual Survey (Kaiser/HRET).
Written by: Catharine Paddock