Rising health insurance rates outpace increase in worker wages

By Maryalene LaPonsie on October 24th, 2011

According to an annual survey of employer health benefits, premiums for employer-sponsored family health plans topped $15,000 a year in 2011. Conducted by the Kaiser Family Foundation/Health Research & Educational Trust, the 2011 Employer Health Benefits Survey found health insurance rates for family coverage averaged $15,073. The price reflects a 9 percent increase from 2010 rates. On average, workers pay less than one-third of the premiums – $4,129 annually – while employers pick up the remaining cost.

Health insurance rates have significantly outpaced both increases in worker wages and inflation. In 2011, wages increased an average of 2.1 percent while inflation was 3.2 percent. Since 2001, the price of employer-sponsored health insurance coverage has grown 113 percent. Meanwhile, wages went up 34 percent and inflation was 27 percent during that same period.

High-deductible plans a popular health insurance option

Employers are increasingly offering high-deductible plans to provide employees with more affordable health insurance. The study found 31 percent of workers are enrolled in a high-deductible medical insurance plan, which is defined as having a deductible of at least $1,000 for single coverage. Of those workers, 12 percent have deductibles of $2,000 or more.

High-deductible plans are especially popular in smaller firms with fewer than 200 workers. Of individuals working for companies employing between three and 199 people, half have deductibles of at least $1,000. That number includes 28 percent of workers who have deductibles exceeding $2,000.

Health reform and health insurance coverage

The 2011 study also shed light on how last year's Affordable Care Act continues to impact health insurance coverage. Most notably, 2.3 million young adults have been added to their parent's employer-sponsored group health insurance. Health reform required insurers to allow children up to age 26 to remain on their parent's medical insurance as dependents.

"The law is helping millions of young adults to obtain health coverage," says Gary Claxton, a Kaiser vice president and lead author of the study. "In the past, many of these young adults would have lost coverage when they left home or graduated college."

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