Cost of Family Health Coverage Increased Sharply in 2011, Survey Finds

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By Kristen Ricaurte-Knebel

The cost of family health insurance premiums rose to $15,073 in 2011, a 9 percent increase from 2010, according to findings from a Kaiser Family Foundation/Health Research and Educational Trust survey released Sept. 27.

Of the $15,073 family premium cost, employees paid a share of $4,129, up from $3,997 in 2010, the survey found.

The sharp increase over last year's overall family cost of $13,770 comes during a slow economic recovery and at a time when “wages have been falling in real terms for many workers,” Drew Altman, president and chief executive officer of the Kaiser Family Foundation, said during a conference call for reporters.

Altman said he could not predict whether this steep increase in family premium costs is an anomaly or a signaling of the beginning of a longer-term trend.

“After four years in a row of growth of 5 percent or less … we just don't know if this is a onetime spike or the beginning of a period of higher increases,” he said.

Although Altman said the survey is not designed to provide answers behind the numbers, he tried to offer insight into the increase by saying some insurers might have expected a faster economic recovery than what actually occurred.

“It appears that insurers and self-insured plans assumed a faster economic recovery and geared their premiums this year to larger increases in utilization than have in fact occurred,” he said.

Early PPACA Successes

Altman said this year's survey included an “implementation success story” for the Patient Protection and Affordable Care Act, with 2.3 million young adults being enrolled in their parents' health insurance plans.

“We found an estimated 2.3 million young adults received coverage as a result of [PPACA], which is at the high end of the original estimates of how many might be covered as a result of the law,” he said.

The survey also found that many employees benefited from preventive service requirements, even though many of those employees remain in grandfathered plans, he said.

‘Quiet Revolution.'

Altman's short-term outlook for employer-sponsored health care plans included an increased offering of high-deductible health plans and higher deductibles.

The survey found that 31 percent of workers are enrolled in high-deductible health plans, with self-only coverage deductibles of at least $1,000.

Twenty-three percent of employers offering health plans have a high-deductible plan option, up from 15 percent of employers in 2010, the survey found.

Altman said the less costly high-deductible plans are the “biggest tool in the toolbox employers have to hold premiums down, and it's a clear trend in our survey year after year.”

“To me, this is the quiet revolution going on in health insurance. It's kind of under the radar screen,” he said.

Debate Sparked

House and Senate Republicans saw the survey's 9 percent premium spike as a prime opportunity to attack health care reform.

House Ways and Means Chairman Dave Camp (R-Mich.) released a statement saying the survey's results confirm “that President Obama broke his campaign promise to reduce health care premiums by $2,500.”

Senate Finance Committee ranking member Orrin G. Hatch (R-Utah) also chimed in, saying the survey's results illustrate that “the partisan health law has contributed to a dramatic increase in health costs.”

Kaiser's Altman, however, read the situation differently.

“In a world where some blame almost everything on what they call ‘Obamacare' … one thing we can say about the premium increase this year is that it is not because of the Affordable Care Act,” Altman said. Based on analysis, PPACA is responsible for about 1.5 percentage points to 2 percentage points of this year's 9 percent increase, he said.

Altman also said the shift to high-deductible health plans more closely resembles the kind of health insurance favored by conservatives, rather than the “comprehensive insurance that liberals have always advocated.”

Other Survey Findings

Other findings of the KFF/HRET survey include:

  • self-only coverage premiums increased by 8 percent in 2011, up to $5,429, with workers paying a $921 share;
  • 60 percent of employers offered health insurance to employees this year, down from 2010's 69 percent but more consistent with pre-2010 numbers;
  • copayments for office visits averaged $22 for primary care;
  • 26 percent of large companies offered retiree health coverage, the same amount as in 2010; and
  • 56 percent of workers are still in grandfathered health plans.

The survey report is at