The cost of health insurance provided by employers for families jumped 9% this year over 2010 as rising healthcare expenses and other factors contributed to the largest premium increases in six years, a national survey shows.
Annual insurance premiums for families reached $15,073 on average this year, up from an average $13,770 last year, according to the Kaiser Family Foundation and the Health Research & Educational Trust, nonprofit groups that conducted the survey.
Employers are picking up the bulk of the costs as they have in the past. This year, they are paying $10,944 on average to cover workers and their families, while employees are paying $4,129.
Even so, workers’ insurance bills have risen at a much fast rate than their earnings, the survey found.
Employee contributions to their health benefits have grown 168% since 1999, more than three times the rate of earnings and more than four times the rate of overall inflation, the data show.
That’s significant because employer-sponsored health insurance is the leading source of health coverage in the United States, providing about 150 million people with benefits.
“A big premium jump is especially tough for workers and employers when they’re facing a faltering recovery, but it’s really tough for workers when wages are declining in real terms,” said Drew Altman, president of the Kaiser Foundation. “The pain factor is pretty high right now.”
The survey of 3,184 public and private employers comes as insurance companies report lower-than-expected use of healthcare services in the wavering economy, driving up profits while cutting into healthcare providers’ revenues.
Insurers say that even people with company-sponsored health insurance are staying away from doctors and hospitals to avoid medical bills.
To cut costs, workers are embracing an increasingly popular approach: enrolling in high-deductible policies that cut their annual premiums but require them to pay more out of their pockets if they require medical care.
This year, 31% of workers enrolled in plans with deductibles of at least $1,000. That’s up from 10% in 2006.
The high-deductible plans are most common among relatively small companies, those with three to 199 employees. Fifty percent of workers at these firms have the high-deductible plans, up from 16% in 2006, the survey found.
The high-deductible plans often allow workers to set aside pre-tax dollars to pay for healthcare expenses. Healthcare experts say that approach allows companies to shift more healthcare costs to employees.
The survey did not project future insurance costs, but a separate report recently predicted that expenses for U.S. employers will slow next year.
Firms are forecasting a 5.4% increase on average in 2012, according to preliminary results from the survey of nearly 1,600 employers by benefits consulting firm Mercer.
The figure reflects cost-cutting measures by employers, as many move employees into lower-cost health plans or raise deductibles.
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-- Duke Helfand
Photo: Karen Bleier / AFP/Getty Images