WASHINGTON (AP) - Annual premiums for job-based family health
insurance went up just 4 percent this year, but that's no comfort with
the price tag approaching $16,000 and rising more than twice as fast as
wages.
The annual survey released Tuesday by two major
research groups served as a glaring reminder that the nation's problem
of unaffordable medical care is anything but solved.
Premiums for a family plan are averaging $15,745,
with employees paying more than $4,300 of that. And lower wage workers
are paying more for skimpier coverage than their counterparts at upscale
firms.
Overall, "it's historically a very moderate
increase in premiums," said Drew Altman, president of the Kaiser Family
Foundation, which conducted the survey with the Health Research &
Educational Trust.
He quickly added: "But even a moderate increase
feels really big to workers when their wages are flat or falling."
General inflation rose only 2.3 percent, by comparison.
Following a 9-percent hike in premiums last year,
the 2012 increase quickly became fodder for the political debate.
Republicans said President Barack Obama's promises to control health
care costs ring hollow in light of the findings.
But the most significant cost-control measures in
Obama's law have yet to take effect, along with the president's big push
to cover the uninsured. The cost controls include a new tax on the most
expensive insurance plans and a powerful board to keep Medicare
spending manageable.
Trying to head off critics, the administration
issued a report estimating that consumers have saved $2 billion as a
result of the health care law. That's due to a combination of insurance
rebates for employers and individual policy holders, as well as closer
state oversight of proposed rate increases, facilitated by Obama's law.
But hang on to your wallets: The Kaiser survey
showed premiums for job-based family coverage have risen by nearly
$2,400 since 2009 when Obama took office, with a corresponding increase
of nearly $800 for employee-only coverage.
"We aren't happy to see any increase in health
insurance premiums," said Gary Cohen, head of the administration's
Center for Consumer Information and Insurance Oversight, adding that
officials are "heartened" it was only a modest rise this year and look
forward to slowing costs as more provisions of the health care law take
effect.
Most independent experts say rising premiums
reflect underlying problems with the health care system that have
frustrated policymakers of both parties for years, as well as corporate
benefit managers.
Indeed, only last week an arm of the National
Academy of Sciences estimated that about 30 cents of every dollar spent
on health care - $750 billion a year - is wasted through unnecessary
procedures, cumbersome paperwork, uncoordinated care and fraud.
Obama says he's working to make health care more
affordable for all by leveraging the power of government programs like
Medicare to pay hospitals and doctors for quality results, rather than
sheer volume of tests and procedures. But that will take time.
Republican Mitt Romney wants to give future
retirees a fixed amount of money to pick either private insurance or a
government plan modeled on Medicare. He expects the private market will
find ways to deliver quality service at lower cost. The GOP approach
mirrors the shift away from traditional pensions, which pay a standard
benefit, to 401(k) savings plans that limit the employer's exposure.
The Kaiser/HRET survey found that employee-only
coverage went up 3 percent this year, with annual premiums averaging
$5,615. Companies usually pick up a larger share of the cost for
employee-only coverage, so workers typically paid about $950 of that.
The availability of employer-based coverage, the
mainstay for working people and their families, remained stable this
year, with 61 percent of all companies offering health benefits.
However, only half of companies with 3 to 9 workers offered health
insurance, while virtually all large firms with 1,000 or more employees
did so.
Companies continued shifting costs to their
workers, at a somewhat slower pace. A trend toward steering employees
into plans with high annual deductibles eased a bit. The deductible is
the amount you must pay each year before insurance kicks in. The survey
found that 34 percent of workers are in plans with annual deductibles of
at least $1,000 for single coverage, up from 31 percent in 2011.
"We don't know if it's a timeout, or if it's
reached some natural limit," said Altman. "It's really something to
watch for in the future because (high deductible plans) have an impact
both on people's budgets and on holding down overall costs."
The survey's focus on health insurance provided to
lower-wage workers highlights one of the major areas of uncertainty
around Obama's health care law.
If the president is reelected and the law goes into
full effect, employers with lots of low-wage workers may be tempted to
drop coverage and send their employees into new state-based insurance
exchanges, markets that will offer taxpayer-subsidized private
insurance. A separate survey this summer by the Mercer benefits
consulting firm found that 9 percent of employers in the retail and
hospitality industries say it's likely they will drop coverage, even if
they have to pay penalties to the government.
The survey found that workers in lower-wage
companies pay $4,977 toward the cost of family coverage, as compared to
an average of $4,316 for all workers. And the policy they get for their
money is less generous, typically worth about $1,000 less.
"They are really paying more and getting less," said Altman.
Most experts believe the sluggish economy provides
the likeliest explanation for the moderate rise in premiums. Last year's
spike was blamed on a mistaken bet by insurers that the economy would
recover faster.
The survey includes more than 2,000 small and large
employers. Asked what kind of increase they're expecting for 2013,
employers said their best estimate at this point is 7 percent - sure to
prompt more pain.
