AHRQ on Employer-based Insurance

The cost of private health insurance is a significant financial concern for working Americans and has been one spur for health reform, although many of the enacted state and federal reforms seems as likely to raise costs as to lower them.  The Agency for Healthcare Research and Quality examined changes in employment-based insurance premiums from 2001-2009, as well as changes in employee cost-sharing.   (AHRQ Report) The report divided coverage types into employee-only, employee plus one and family.  The data comes from the Medical Expenditure Panel Survey–Insurance Component, an annual survey of employers.

For comparison sake, in the 2001-2009 period CPI increased 21.1%.  In this same time frame, single coverage premiums rose 61.1% from $2,889 to $4,669 but employee contributions went up 92.2%.  Employee plus one coverage went from $5,463 to $9,o53, a 65.7% gain, with the employee share rising 120.8%.  Family coverage started at $7509, increasing to $13,027 at the end of the period, or a 73.5% increase, but the employee contribution went up 99.5%.  It appears that employers were less willing to pay for coverage of people other than the employee and wanted to disincent adding those dependents to the plan.  It is also apparent that premiums were rising at 3 to 4 times the rate of general inflation, and the employee share even faster.

The rate of growth remained relatively stable, but rapid, over the entire period.  There are few indications that it is currently slowing and some of the new requirements, such as parity in mental health treatment, adding children to age 26, limiting copayments and eliminating lifetime caps will raise costs.  Provider market power has led to continuing unit price increases which ultimately are reflected in health insurance premiums, and that market power only seems to be growing.  It is hard to imagine how the average American can cope with this increasing burden, which undoubtedly causes great financial and emotional stress.