Healthcare Technology Featured Article

September 27, 2011

While Health Insurance Costs Rise, Employers May Drop Coverage

Think you’re paying more for your employer-sponsored health insurance? You are.

A new survey shows that the average cost of employer-sponsored health insurance soared this year, reversing a trend toward moderate growth, according to an AP story at Workers’ wages rose only 2 percent, according to Drew Altman, Ph.D., Kaiser Family Foundation (KFF)’s president and CEO.

The survey, done by the Kaiser Family Foundation, found that annual premiums for family coverage rose nine percent compared to 2010, when they rose much less than half that, only three percent, according to the story.

Altman also reports that since the foundation began doing this survey more than 10 years ago, “worker contributions to premiums have increased 168 percent, wages 50 percent, and inflation 38 percent.”

Another survey, this one by the consulting firm Tower Watson, found that one out of every 10 mid-sized and large companies plan to eliminate health insurance coverage once federal insurance exchanges kick off in 2014, according to Ryan Jaslow at CBS News.

But here’s the good news: experts believe increases in healthcare costs may slow again in 2012, according to the AP story.

Who’s paying? KFF says companies and workers usually split the premium for employer-sponsored coverage, which is still the most common form of health insurance in the United States, the AP story says.

The study does not look into why rates exploded this year, but Kaiser officials believe it may be because the cost of care continues to rise. New health care overhaul provisions may also have played a small role. Interestingly, KFF reports, growth in health care use has slowed this year, and that may lead to slower premium growth next year, according to the AP story.

Deborah DiSesa Hirsch is an award-winning health and technology writer who has worked for newspapers, magazines and IBM in her 20-year career. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves

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