Wednesday, October 26, 2016

Workplace health insurance premiums taking a greater share of paychecks, says study

Income growth is not keeping pace with rising costs of workplace health insurance premiums, says a study released this week by The Commonwealth Fund, a nonpartisan health and social issues research organization. "Despite a recent surge, income growth has not kept pace in many areas of the U.S. employee contributions to premiums and deductibles amounted to 10.1 percent of U.S. median income in 2015, compared to 6.5 percent in 2006. These costs are higher relative to income in many southeastern and southern states, where incomes are below the national average."

Nationwide, "the cost of a family policy went up an average of 5.1 percent annually before 2010 and 4.5 percent after," Bill Estep reports for the Lexington Herald-Leader. "That likely reflects a drop in health care costs across the country, the study said. Premiums still went up, however." In Kentucky, for example, "the average employee cost of a single-person policy went up from $3,791 in 2006 to $5,984 in 2015. The cost to employees for a family plan rose from $9,864 to $16,622 in that time. That was below the national average of $17,322." (Herald-Leader graphic)
In nine states "premiums for single coverage continued to increase at a relatively high rate," Estep writes. In Kentucky, one of those nine states, the average annual increase "was 5.4 percent from 2006 to 2010 and only slowed to 5 percent a year since." Researchers say that's why many Americans with insurance see their health care costs as unaffordable, because of premiums and deductibles taking a greater share of income.

"The growth in the number of plans with deductibles, and the size of those employee contributions, is a particular issue," Estep writes. "In 2006, there were no states where the average deductible topped $1,000, but in 2015 every state but Hawaii had average deductibles higher than $1,000, the report said."

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