Friday, August 23, 2013

Employer-Sponsored Family Health Premiums Rose to $16,350 in 2013

Note: It is important to remember that these stories can be misleading.  When they tout a 4% increase they are talking about the renewed plans after plan degradations are made to reduce the cost of a company's renewal.   

Annual premiums for employer-sponsored family health coverage in the U.S. reached $16,351 in 2013, up 4 percent from 2012, with workers paying an average of $4,565 toward the cost of their coverage, according to the nonprofit Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2013 Employer Health Benefits Surveyr Health Benefits Survey.

During the same period, workers’ wages and general inflation jumped 1.8 percent and 1.1 percent, respectively.

The recent rise in premiums remains moderate by historical standards. Since 2003, premiums have increased 80 percent, nearly three times as fast as wages (31 percent) and inflation (27 percent).

“We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers,” Kaiser President and CEO Drew Altman said in a media release. [Note that the moderation began long before PPACA's passage.  It is due to the economic recession and individuals spending more of their own dollars on healthcare, thereby injecting more consumerism into the picture.   See here for more in that.]. 

The 15th annual Kaiser/HRET survey of more than 2,000 small and large U.S. employers revealed that in 2013:

  • Firms with many lower-wage employees (at least 35 percent earning $23,000 or less annually) require workers to pay an average of $1,363 more toward annual family premiums than employees at firms with fewer lower-wage workers ($5,818 vs. $4,455).
  • Workers pay 18 percent of the premium costs for single coverage on average, and 29 percent of the premium cost for family plans, rates that have changed little in a decade.  
  • Lower-wage companies, on average, offer less costly coverage, creating a large disparity in the share of the premium that their workers pay (39 percent at lower-wage firms vs. 29 percent at higher-wage companies). ...
  • The average deductible for worker-only coverage is $1,135, barely higher than the $1,097 average deductible in 2012.
  • Among all covered workers, 38 percent have a deductible of at least $1,000. At small organizations, 58 percent of covered employees must meet a deductible of at least $1,000, including nearly a third (31 percent) who face a deductible of at least $2,000, up from 12 percent in 2008...

Grandfathered Plans

The survey also revealed that 36 percent of covered workers are in grandfathered plans as defined by the ACA, down from 48 percent last year. The shift means that a rising share of employers will have to comply with the health law’s requirements for nongrandfathered group plans, such as covering preventive benefits without cost sharing and offering an external appeals process.

Grandfathered plans, which were in place before the law’s passage, are exempt from these provisions. Plans lose their grandfathered status if they make significant changes to reduce benefits or raise workers’ costs. ...

The survey was conducted from January through May 2013 and included 2,948 randomly selected nonfederal public and private firms with three or more employees.