Same Old Story: Health Insurance Premiums Soar, Yet Again

  • Share
  • Read Later
Tomas Bercic / Getty Images

Haven’t we all heard this one before? The average cost of health insurance premiums rose sharply this year: Family costs are up 9%, topping $15,000 annually for the first time. Over the last 10 years, family premiums have risen by 113%—exponentially faster than workers’ wages and inflation.

The Kaiser Family Foundation report offers all the grim statistics, in particular that the average health insurance premium for a family—arranged through an employer, not independently via the private market—costs $15,073 this year, up from $13,770 in 2010. If there’s any consolation to the most recent insurance premium price hike, it’s this: While the overall increase for families (9%) outpaces the average rise in workers’ wages (2.1%) and inflation (3.2%), employers are picking up the bulk of newly more expensive rates.

CNN Money highlights the fact that employers are paying 12% more ($10,944 total, on average) for their employees’ family policies, while the employees themselves are paying 3% more than a year ago ($4,129).

(MORE: 15 Financial Moves to Make Right Now)

Over the last decade, however, employees have steadily been paying more for their employer-sponsored premiums: The Kaiser report shows that since 2001, overall family insurance premiums have risen 113% (from $7,061 to $15,073 annually), while the amount workers contribute to these premiums via deductions from a paycheck have soared 131% over the 2001-2011 span ($1,787 to $4,129).

What’s more, while the increase of a mere 3% in the portion paid by employees seems reasonable—basically keeping pace with inflation—it’s more and more likely that workers have to pay more out of pocket for actual health services. Currently, 31% of workers are in plans with a deductible of at least $1,000. In 2010, 27% of employees were in such plans, and in 2009, only 22% could expect to be on the hook for $1,000 or more in deductibles if their families needed health care. So, in all likelihood, the typical employee is facing an increase of much more than 3% in health care costs.

The effects of ever-pricier health care hits Americans in other ways as well. One reason wages have remained stagnant is that employers are paying more for employee health insurance premiums—money that might otherwise go to bumps in salaries. Labor Department statistics show that both consumer spending and average incomes declined last year—and both of those slowdowns significantly slow down the economy as a whole.

(MORE: The Sad, Sorry State of the Middle Class)

Consumer Reports, meanwhile, offers data indicating just how dangerous the combination of tough economic times and expensive health care can be. In a recent survey of people who regularly take prescription medicines, 48% said they’ve been trying to save money by putting off doctor’s visits, delaying medical procedures, and/or declining a medical test. Plenty of others admitted to not filling prescriptions, sharing meds with others, splitting pills in half without a doctor’s consent, and partaking in other potentially risky actions, all to avoid having to pay more out of pocket.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

0 comments
Sort: Newest | Oldest