WASHINGTON — Health insurance premiums are up at less than the double-digit pace of a decade ago, but that’s not likely to cheer consumers who are devoting more of their income to medical care.
Health care analysts at the Kaiser Family Foundation and the Health Research & Educational Trust said Tuesday that the average family policy cost $16,351 this year, with workers paying $4,565 of that and employers paying the rest.
Milliman Inc., a Seattle-based benefits consulting firm, reported in May that the average family with employer-provided insurance was spending more in a year on health care and premiums ($9,144) than on groceries.
Add in the employer’s share of premium costs, and family health care spending is $22,030 a year, Milliman found.
Kaiser’s survey of more than 2,000 companies offering insurance found family policy premiums increased 4 percent this year.
Premiums for individuals getting health insurance at work went up 5 percent. The cost of individual plans averaged $5,884, with workers paying $999 of that amount.
Wages, meanwhile, grew less than half as much. After taking inflation into account, median family income has been virtually flat for a decade.
Drew Altman, Kaiser’s president and CEO, said the premium results showed “striking moderation.”
“If and when that moderation will end remains a debate in the field. No one knows for sure,” he said. But “this is not an environment where companies should be contemplating big cuts in benefits to contain costs.”
Still, more companies — 78 percent — are requiring workers to pay a substantial deductible before their coverage kicks in. The average deductible for a single worker reached $1,135 this year.
Health care consultants at Aon Hewitt and Milliman have also reported slower premium growth, but to levels that are straining household budgets. Milliman’s Medical Index was 6.3 percent higher for 2013 than for 2012.
“That is one of the lowest rates we have seen for a number of years,” said Lorraine Mayne, an author of the Milliman Index and a principal consulting actuary with the company’s Salt Lake City office.
‘Just frightening’
Aon Hewitt has estimated that premiums in the Dallas-Fort Worth area increased 6.2 percent this year, after rising 3.4 percent in 2012. Marianne Fazen, executive director of the Dallas-Fort Worth Business Group on Health, said premiums are likely to rise 4 percent next year.
Fazen said of the Kaiser finding on average insurance costs: “When you think about $16,351 for a family of four, that’s just frightening.”
Kaiser’s survey found that 57 percent of companies offer health insurance as an employee benefit, covering 149 million Americans. Medicare, Medicaid and individual insurance policies cover more than 100 million other Americans, with the balance uninsured.
Millions of uninsured people are expected to sign up for coverage under the Affordable Care Act beginning in October through health insurance exchanges run by either the federal government or the states. (Washington is running the exchange for Texans, because the state government refuses to participate.)
Those who get their insurance at work or through Medicare won’t be affected by the exchanges.
Premium growth has slowed in step with overall health care spending. The federal government’s national survey of health care expenditures found a 3.9 percent increase in 2009, 2010 and 2011 — the latest year for which figures are available.
High-deductible trend
Mayne said companies aren’t relaxing as premium increases ease.
“It’s still a period of time when there’s been a lot of pressure on companies over the cost of production and of labor,” she said. “They’re still paying very close attention and looking for ways that they can get as much value as they can from what they are spending on that benefit.”
The cost of employer-provided health insurance has grown to a point where many companies say it crimps their ability to raise salaries or hire new workers. Many companies are trying to curb health care spending by their workers through wellness programs, high-deductible plans and higher premiums for employees who smoke.
Kaiser’s survey found that more than half of larger companies now provide biometric screening to identify concerns such as high blood pressure, pre-diabetes, smoking or obesity among their employees.
Increasing the share of costs borne by employees has also been a major trend in recent years.
“The trend toward high-deductible plans continues, especially for smaller firms,” Altman said. “From a political dimension, conservatives are very upset with Obamacare, but beneath the radar screen, their version of insurance with much more skin in the game for consumers is coming to dominate.”
Follow Jim Landers on Twitter at @landersjim.
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