The cost of employee health insurance grew faster than income in every state, an analysis of data from 2003 to 2011 shows, and health benefits increasingly failed to protect workers from the cost of getting injured or ill.
The analysis of health insurance in the workplace by the health policy foundation the Commonwealth Fund underscored the financial strain on household and business budgets from the country's rising healthcare costs. Fast-growing premiums outpaced wages, the report said, and have "been consuming resources that employers might otherwise have earmarked for salary or wage increases, for other benefits or for hiring additional workers."
A worker, on average, spent $3,962 on family premiums in 2011, an increase of 74% from 2003. Meanwhile, the average family premium totaled $15,022, an increase of 62% from 2003, the report said. "It's real money," said Cathy Schoen, senior vice president of the Commonwealth Fund.
The Patient Protection and Affordable Care Act, however, should help slow the growth in premiums and overall health spending, Schoen said. She cited provisions that increase health insurance oversight; expand access with insurance subsidies; create health insurance exchanges to pool individual and small-business consumers; and nurture new payment models to reduce waste and improve quality. The law also includes limits on out-of-pocket spending and a cap on benefits.
A larger share of insured workers had deductibles last year (78%) than in 2003 (52%), and deductibles doubled during that time. The average family deductible increased 106% between 2003 and 2011 to $2,220, according to the report. For single coverage, the average deductible last year was $1,123, an increase of 117% for the same period.
Family premiums could total $24,740 by 2020, based on historical rates, the report said.
The Kaiser Family Foundation and the Health Research & Education Trust concluded from a survey of 2,000 employers that health insurance premiums increased 4% in 2012, compared with 9% in 2011. In a report on the findings
, Kaiser characterized the growth rate as "moderate by historical standards," though still outpacing wages.
The health insurance industry's trade group, America's Health Insurance Plans, has argued that the healthcare reform law does little to address the rising costs of healthcare services that drive premiums.
Hospital and health system officials have cited higher deductibles for an increase in unpaid bills and the number of patients who delay seeking care, according to healthcare borrowers' credit rating reports.
Workers' out-of-pocket spending on healthcare increased in 2011 by 4.6%, or $32, to $735, according to data from the Health Care Cost Institute
, a not-for-profit research organization with funding and claims data from private insurers.
Higher prices largely accounted for the increase, said Martin Gaynor, board chairman for the institute and an economics and public policy professor for Carnegie Mellon University. Healthcare spending for patients with employer-sponsored benefits increased last year by 4.6% compared with 3.8% the prior year, the Health Care Cost Institute data show.