Health insurance premiums have increased modestly this year, but it might not feel that way to the average American worker.
The total premium — the combined amount employers and their workers pay for health insurance — rose about 5 percent on average for single coverage and 4 percent for family plans, according to a study released Tuesday by nonprofit research groups Kaiser Family Foundation and the Health Research & Educational Trust.
The price increases for health insurance coverage offered by employers are significantly lower than the double-digit percentage hikes seen several years ago, said Drew Altman, president and chief executive of Kaiser Family Foundation.
“There’s no question this is a year with very moderate premium increases,” he said.
Still, that’s not easing the perceived financial pain.
Preliminary results from another forthcoming Kaiser Family Foundation poll found 54 percent of people believe the cost of health insurance premiums are increasing faster than usual.
“I think that’s because over time, what people pay for their health coverage has so significantly eclipsed the increases in inflation and their wages,” Altman said.
The average premium increase this year, though modest, still is significantly larger than the average 1.8 percent increase in workers’ wages, according to the survey.
Since 2003, the survey found, premiums have increased 80 percent, compared with 31 percent for wages and 27 percent for inflation.
For the first time, the average total annual premium for family coverage topped $16,000 this year, reaching $16,351, according to the survey.
The average worker is paying $4,565 this year toward the total cost of family health coverage — a $249 spike from the previous year.
The economy’s slow recovery likely is contributing to the modest premium increases, said Kaiser Vice President Gary Claxton, the study’s lead investigator. It typically takes about five years for consumers to increase the medical services they use after an economy bounces back.
Consumers pay more
A continuing effort to shift costs to consumers also could be resulting in slower growth in average premium costs, Altman said.
This year, 78 percent of workers pay an annual deductible, an increase from 72 percent last year and 57 percent in 2008.
Among workers enrolled in a plan with a deductible, the average they pay before most health-care services are covered is $1,135 — an increase from $1,097 last year and $735 in 2008.
The trend is part of a “quiet revolution in health insurance” toward less comprehensive coverage, Altman said. “It’s part of the cost-sharing story, which we all think is playing a role in the slowdown of health-care costs we’re seeing.”
The trend toward modest premium increases could begin to shift in 2014.
Initial increases to renew annual health coverage in the region are trending 10 to 12 percent for next year, said J.T. Shilling, a principal with national consulting firm Mercer who covers western Pennsylvania and Northeast Ohio.
Health insurers are passing along new costs associated with federal health-care reform in 2014, including a fee averaging $63 per enrollee per year to help cover large claims in the new federal and state health insurance exchanges, Shilling said.
“It’s an additional cost that employers didn’t have to deal with before,” he said. “It’s more pressure to try to control costs and look for creative ways to offset these additional costs.”
Wellness programs
Northeast Ohio employees are embracing wellness programs to offset the increases, Shilling said.
Under federal health-care reform, employers can tie as much as 30 percent of the total premium cost to wellness incentives in 2014, an increase from 20 percent this year, he said.
Nationwide, the Kaiser survey found 99 percent of all large firms with 200 or more employers are offering at least one wellness program this year. Three-quarters of smaller employers also are using at least one wellness program, ranging from nutrition classes and flu shots to gym membership discounts and smoking cessation classes.
About 11 percent are offering rewards or penalties based on “biometric screenings,” or risk factors that include cholesterol, blood pressure, stress and nutrition.
Cheryl Powell can be reached at 330-996-3902 or cpowell@thebeaconjournal.com. Follow Powell on Twitter at twitter.com/abjcherylpowell.