The High Cost of Health Goes Higher
The price of health insurance is soaring, says new study
By Amanda Gardner
Sept. 14 (HealthScoutNews) -- If health-care costs went
through the roof years ago, they now seem to have reached the
new survey by the Kaiser Family Foundation and the Health
Research and Educational Trust finds that premiums for
employer-sponsored health insurance, which covers two of three
Americans, increased an average of 11 percent in 2001, the
largest increase since 1992. Overall inflation during the same
period was only 3.3 percent.
survey of 2,734 firms, ranging in size from three to more than
300,000 employees, says average annual premiums shot up to
$2,650 for single coverage and to $7,053 for family coverage
between the spring of 2000 and the spring of 2001. That
translates into average monthly premiums of $221 for single
coverage and $588 for family coverage.
surprisingly, the smallest firms (three to nine employees) had
the highest average increase (16.5 percent). Firms with three
to 199 workers had an average increase of 12.5 percent (versus
a 10.3 percent increase in 2000), and large firms experienced
a 10.2 percent increase (compared with 7.5 percent in 2000).
Premiums were highest in the Northeast and lower in the West.
driving the increase? "We see it as a combination of
forces," says Joe Luchok, spokesman for the Health
Insurance Association of America, a trade group representing
the private health care system. One is drug costs that the
study says rose an average of 15.5 percent last year. There's
also a shift away from Health Maintenance Organizations (HMOs)
and towards the more expensive but less restrictive Preferred
Provider Option (PPOs). Among other differences, HMOs require
people to use specific doctors; PPOs are networks of doctors
and hospitals that charge members less for services.
factors include the rising costs of medical technology,
government requirements that employers offer more choices to
employees, higher spending for hospital and physical care and
higher insurance profits.
far, employers still are assuming most of the cost burden, but
that probably won't last. Three-quarters of the large
companies and 42 percent of the smaller businesses surveyed
reported they are "very" or "somewhat
likely" to increase employees' contributions for health
insurance in the next year.
next year, employers will pass along increases to workers and
will have to pay more out of pocket," says Jon Gabel,
vice president of Health Research and Educational Trust and
the study's lead author. "Many younger and lower-income
workers will not find coverage." The number of uninsured
probably will rise as well.
already have shifted some of the burden to their workers in
the form of higher deductibles and co-payments. The survey
says employees contributed an average of $30 a month for
single coverage and $150 for family coverage. The average
deductible for non-preferred providers in PPOs rose from $361
last year to $407 this year. Average co-payments for
non-preferred brand name drugs jumped from $16 to $20.
problem may go way beyond insured and uninsured. "To me,
this increase is just part of the larger issue, which is that
we don't have an adequate delivery system for health
insurance. Thirty percent of the work force is not working for
an employer in the traditional way," says Sara Horowitz,
founder of Working Today, a national nonprofit organization
that represents the concerns of America's independent
workforce. "We're just going to see costs going higher
and higher and insurance companies pulling out of the
individual market more and more. We have to be focused on ways
to end this death spiral."
more information on health insurance and health insurance
trends, visit Working
Today or the Health
Insurance Association of America.
For more information on the new study.
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