Job-based health premiums increasing slowly, deductibles faster

Healthcare (Kent D.Johnson/Atlanta Journal-Constitution/MCT)
Healthcare (Kent D.Johnson/Atlanta Journal-Constitution/MCT) MCT

Average premiums for job-based family health coverage are up just 3 percent this year, while the cost of single coverage rose only 2 percent, continuing a sustained trend of moderate growth in insurance costs, according to a nationwide survey of more than 2,000 businesses.

The slowdown in premium growth is good news for the estimated 150 million Americans with employer-sponsored health coverage.

But the overall benefit to consumers is muted because the slowdown is occurring amid relatively flat wage growth and a noteworthy rise in deductibles, the out-of-pocket costs that patients pay before their coverage kicks in.

Employer-sponsored coverage for a family of four costs an average of $16,834 this year, compared with $16,351 in 2013, according to the annual Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research & Educational Trust, the education arm of the American Hospital Association.

Individual coverage costs an average of $6,025 in 2014, compared to $5,884 last year.

Both increases pale in comparison with the double-digit premium hikes that occurred from 2000 to 2004. And they continue a nine-year run of mostly 3 to 6 percent annual increases, the survey reported.

In fact, this year’s 2 percent hike for individual coverage marks the first statistically insignificant premium increase in the survey’s 16-year history.

As they did in 2013, covered workers pay an average of 29 percent, or $4,823, toward their family insurance costs in 2014. Employers pay the other 71 percent, an average of $12,011, the survey found.

Single workers pay an average of 18 percent, or $1,081, toward their coverage, with employers picking up the remaining 82 percent, or $4,944. Those percentages are also unchanged from last year.

Most experts credit the slower premium growth to a sluggish economy that limits consumers’ use of health services, the proliferation of less comprehensive coverage and more efficient delivery of health care services.

But there’s little agreement on which of these factors is most responsible for the slowdown and how soon, or whether, insurance costs will begin to pick up, said Drew Altman, the president and CEO of the Kaiser Family Foundation, a health policy research group.

“There is no question but that we are seeing historic moderation in costs, including in premiums, now over a considerable period of time,” Altman said during a conference call Wednesday. “But if you say that to an average person, they may very well look at you like you’re out of your mind.”

That’s because workers’ earnings and inflation have grown 2 percent and 2.3 percent, respectively, this year, virtually nullifying the effect of the slow premium growth.

In addition, the average health-plan deductible of $1,217 for single coverage _ while virtually unchanged from last year _ is up 47 percent from 2009, when it was $826, as employers continue to shift more health care costs to workers.

This year, 41 percent of covered workers face deductibles of at least $1,000, nearly double the share from five years ago. Eighteen percent have deductibles of at least $2,000.

On average, deductibles for all types of family plans have increased along the same trend lines as those for individual plans, according to Kaiser.

“From the point of view of an average person, their premiums are still going up, their cost sharing is still going up, at a time when, even though wages are doing a little bit better, they’re still pretty flat,” Altman said. “So don’t expect your average reader or viewer out there to have the same sense . . . that we’re living in a world of historic moderation in health care costs. They live in a different world.”

More than seven times as many people get their health coverage through employers as through the individual insurance market, which was recently overhauled by the Affordable Care Act.

Just 55 percent of all firms offer health coverage this year, down from 57 percent last year and 61 percent in 2012. This is a trend that began in the early 2000s, and it’s driven mainly by companies with only three to nine workers dropping coverage.

Among companies that have at least 50 workers, 92 percent still offer coverage, the survey found.

Concerns about employers moving covered workers to the health insurance marketplaces weren’t reflected in the survey, said Gary Claxton, a Kaiser foundation vice president. But some small companies that are struggling to provide coverage might begin to do so in the future.

“If this is going to happen, we’ll watch it unfold over the next couple of years as they see how the exchanges work and are able to balance the opportunities,” Claxton said.

More than 90 percent of all employers offer health insurance coverage to workers, their spouses and dependents. The survey found that 49 percent of companies with 200 or more employees offer coverage to same-sex domestic partners, and 39 percent of companies that have fewer than 200 employees do so.

Only 26 percent of covered workers are in “grandfathered’ plans that don’t meet the new coverage requirements and consumer protections required by the Affordable Care Act. That’s down from 36 percent last year.