President Obama may not have much trouble persuading the nearly 160 million people who have health insurance through their employers that the system needs to be fixed, if a new survey of employer health benefits is any indication.
Many working Americans may be experiencing something akin to sticker shock. The average cost of a family policy now exceeds $13,000 a year, having doubled over the last decade, according a new survey by the Kaiser Family Foundation.
While premiums rose a relatively modest level — 5 percent — last year, they are still going up much faster than overall inflation and workers’ wages, said Drew Altman, the chief executive of the foundation. “It’s one of the reasons why people feel the pain,” he said.
Kaiser, a nonprofit research group, conducts the benefits survey annually with the Health Research & Educational Trust, a research organization affiliated with the American Hospital Association.
By Mr. Altman’s calculation, similar increases over the next decade would translate to the average policy for a family costing in the neighborhood of $24,000 a year.
“When you see premiums, it’s obvious that small employers and working people are just going to be priced out of the market,” he said. Many Americans may need subsidies to be able to afford a policy, he said. Congress and the White House are still struggling to figure out how to reduce costs of insurance over the long term.
The premium figures count the total money the employer and the employee spend together for the insurance coverage.
Employees are not only paying more in their share of premiums — $3,515 a year, on average. They are getting less coverage for the money, according to the survey, as their own out-of-pocket contributions increase through higher annual deductibles and co-payments.
“What we’ve seen in this survey over the years is the gradual fraying of the employment-based system,” said Mr. Altman. Since the country backed away from H.M.O.-style managed care in the late 1990s, it has been without “a new answer to the rising cost of health care,” he said.
Although large employers are also cutting back on the generosity of their coverage, “the real Achilles heel is the small employers,” said Mr. Altman. As many as 40 percent of employees at small companies pay a deductible of $1,000 or more, compared with only 21 percent of workers in 2007.
While the economic downturn has not yet resulted in a significant increase in the number of employers that have stopped offering coverage altogether, many companies said they planned to continue asking employees to shoulder more of the cost next year. One fifth of companies surveyed said they were “very likely” to ask employees to contribute more toward the cost of premiums, and 16 percent said they were “very likely” to increase the amount of the deductible.
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